SME Sarawak urges practical GST-like features in SST

What happened

SME Association of Sarawak (SME Sarawak) president Jordan Ong Chung Siang said any Goods and Services Tax (GST)-like features added to the existing Sales and Service Tax (SST) framework must stay practical and manageable for micro and small businesses. He spoke in Kuching on Aug 20, as reported by Borneo Post Online.

Ong acknowledged that SMEs understood and supported the government's goal of making Malaysia's tax system more efficient. His comments came amid ongoing discussions about possible tax changes.

Why it matters

Micro and small businesses form the backbone of Sarawak's economy. Many lack the accounting capacity to handle complex tax compliance.

Adding GST-like features without simplifying processes could burden these firms with extra administrative costs. The government's tax reform aims to broaden revenue, but implementation must balance fiscal goals with business viability.

Impact on Malaysia

Malaysia's current SST framework is simpler than the previous GST, which was abolished in 2018. Any shift toward GST-like features could affect pricing, cash flow, and compliance nationwide.

SMEs in Sarawak, many operating in rural areas, face challenges such as limited digital infrastructure and trained staff. Practical design is critical to avoid excluding smaller players from formal economic activity.

What SMEs want

Ong stressed that tax changes should not disrupt day-to-day operations of micro and small enterprises. He called for clear guidelines and adequate transition periods if new features are introduced.

SME Sarawak has previously urged the government to consult with business associations before finalizing tax policy. Ong's statement reinforces that call for dialogue.

Broader context

The federal government has been exploring ways to enhance tax collection without reintroducing GST in full. SST currently applies to specific services and goods, while GST covers a wider base.

SMEs account for about 97% of Malaysian businesses and contribute significantly to employment and GDP. Their feedback is crucial for any tax reform to succeed.

Next steps

Industry groups like SME Sarawak are likely to submit formal recommendations to the Ministry of Finance. The government may hold public consultations before any legislative changes.

Ong's comments serve as an early signal that tax reform will face scrutiny from the SME sector. Implementation details will determine the level of acceptance.