LATEST NEWS   FGV appoints Nurul Muhaniza Hanafi as its group managing director | AMMB's net profit rose to RM520.22 mln in 1Q FY2027 from RM516.17 mln a year earlier, and revenue increased to RM1.32 bln versus RM1.29 bln previously | Malaysia, Phillipines discuss expediting repatriation of over 1,000 Filipinos from four detention centres in Sabah - FM Mohamad Hasan  | 

Broaden SST Exemptions To Reduce Tax Cascading -- CTIM President

By Niam Seet Wei

KUALA LUMPUR, Aug 18 (Bernama) -- The government could consider incorporating positive elements of the goods and services tax (GST), such as broadening exemptions, into the existing sales and service tax (SST) to reduce cascading taxes, said a tax expert.

The Chartered Tax Institute of Malaysia (CTIM) president Alan Chung agreed that it may not be appropriate to consider the reintroduction of GST given the current economic climate and rising cost of living.

Ad Banner

“GST is broad-based, and more goods and services may be subject to taxes,” he told Bernama in response to Prime Minister Datuk Seri Anwar Ibrahim’s remarks today.

Anwar, who is also the Finance Minister, said the government is prepared to study a proposal to combine elements of GST with SST to ensure the country's taxation system is more progressive.

Echoing Anwar’s view, Chung said the broad-based nature of GST means those facing economic hardship would also be subject to the tax, with taxes on essential goods and services constituting a higher percentage of their net disposable income.

Ad Banner
Ad Banner
Ad Banner

Nonetheless, Chung said GST in some ways is superior to SST, as it is more transparent and less prone to tax cascading, also known as tax-on-tax, while SST has narrower exemptions, resulting in tax cascading and concerns over double taxation.

“SST is also more complicated and differences in interpretation can give rise to disputes,” he said.

Chung said CTIM welcomes the government’s move to incorporate positive elements of GST into SST.

“We welcome the government’s move to incorporate positive elements of GST into SST, and we eagerly await the proposals to be announced,” he added.

-- BERNAMA