Govt will not consider core GST principle, open to adjusting SST - PM

 

The government will not consider the basic principle of the goods and services tax (GST) as a broad-based tax, while remaining open to making adjustments to improve the implementation of the sales and service tax (SST), Prime Minister Anwar Ibrahim said.

Anwar, who is also finance minister, said the government could also consider some components of the GST, but stressed that its core principle is not to increase the tax burden on the poorest segment of the population.

"I'm not prepared to consider the basic essence of GST because it is still a broad-based tax. They will impose tax on every single citizen, including the poorest of the rakyat.

“So, that principle must be observed," he told reporters after officiating at the TikTok Shop Summit 2026 in Kuala Lumpur today.

Anwar had earlier announced that the government was considering reforming its consumption tax regime to make it more progressive and efficient, including potentially reintroducing aspects of a broad-based GST.

The issue has been widely discussed, with various proposals highlighted, including a tax on electronic payment transactions to broaden tax revenue, as well as bringing back the GST to enable the government to achieve its fiscal targets.

Malaysia adopted the SST regime after moving away from the GST in 2018 amid an outcry over rising living costs.

Anwar further explained that the core principle of the Madani government is not to increase taxes on the very poor.

"Whether we need to make some adjustments in the way to improve the implementation of the SST or some components of GST, of course, we can do that.

"But the core principle of this Madani government is not to increase taxes on the very poor. Therefore, the GST principle cannot be considered," he added.

- Bernama