Malaysia Must Explore Alternative Fiscal Measures Amid SST Expansion Pause

KUALA LUMPUR, May 6 (Bernama) -- Malaysia must explore alternative policy tools like targeted aid, phased implementation, enhanced enforcement, and new digital/green levies as the government takes a strategic pause on expanding the sales and service tax (SST).

While the decision may impact near-term revenue, it is a prudent measure to bolster the country’s economic recovery, said the Economic Club of Kuala Lumpur (ECKL) chairman, Datuk Seri Mohamed Iqbal Rawther, in a statement today.

He said households and businesses are still navigating post-pandemic uncertainties and global headwinds, and introducing new taxes now could stifle growth and undermine fragile gains.

“This delay prioritises immediate relief over revenue extraction, aiming to preserve consumer confidence and business resilience.

“While we acknowledge the fiscal implications, this breathing space is crucial,” he said.

Mohamed Iqbal said transparency regarding SST benefits is also vital for public trust.

Learning from Malaysia’s past experience with the goods and services tax and regional value-added tax models, a well-timed and carefully communicated tax reform remains a long-term goal, he said.

“However, the current delay reflects a calculated decision to ensure a stable economic foundation before revisiting expansion,” he said, adding that the pause is not a retreat but a strategic step to avoid hindering the nation’s progress.

-- BERNAMA