KUALA LUMPUR: The government chose to expand the Sales and Service Tax (SST) after evaluating both SST and the Goods and Services Tax (GST), said Finance Minister II Datuk Seri Amir Hamzah Azizan.
He stated that the expanded SST was designed to be progressive and fairer, ensuring the tax burden falls on those with greater financial capacity.
“Key considerations included system readiness, targeted impact, and the ability to adopt a more focused taxation approach under SST,” he explained during the Dewan Rakyat debate on the 13th Malaysia Plan.
Amir Hamzah noted that GST’s exemptions were fewer compared to SST’s broader list of excluded goods and services.
The government expects RM5 billion in additional revenue for 2025 and RM10 billion for 2026 from the expanded SST.
“This revenue will strengthen social safety nets, including increased allocations for STR and SARA programmes,” he added.
The STR and SARA budgets will rise from RM10 billion in 2024 to RM15 billion in 2025 to help Malaysians with living costs.
On carbon tax, Amir Hamzah confirmed plans for a 2026 rollout, initially targeting high-emission sectors like iron, steel, and energy.
“The framework will align with Malaysia’s climate goals and consider existing measures like fossil fuel subsidy reforms,” he said.
The Finance Ministry is studying carbon tax models from Norway, the UK, Singapore, and other nations to refine Malaysia’s approach. – Bernama
