SME Sarawak urges practical GST-like tax features
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 remain practical and manageable for micro and small businesses.
He made the statement in Kuching on Aug 20, responding to government plans to potentially broaden the tax base. Ong acknowledged that SMEs understood and supported the government's objective of making Malaysia's tax system more efficient.
Why it matters
Malaysia's government has been exploring ways to expand revenue without reintroducing the full GST, which was abolished in 2018. Any GST-like mechanism embedded in SST could affect millions of small businesses across the country.
SMEs form the backbone of Malaysia's economy, accounting for nearly 40% of GDP. Adding complex tax features could impose new compliance burdens on businesses with limited accounting resources.
Concerns for small businesses
Ong highlighted that micro and small enterprises often lack dedicated tax staff. He urged the government to ensure any new features are simple to implement and do not disrupt daily operations.
The association's stance reflects broader worries among business groups about administrative costs. Previous GST implementation in 2015 caused significant compliance challenges for small traders.
Government position
The government has not confirmed specific GST-like features for the SST framework. Officials have said any reform would be studied carefully to balance revenue needs with business competitiveness.
SME Sarawak's feedback aligns with calls from other industry associations for consultation before policy changes. Ong said the government should engage SMEs early in the design process.
Impact on Sarawak
Sarawak has a large number of small and micro enterprises, particularly in rural areas. These businesses often operate with thin margins and limited digital infrastructure.
Any new tax compliance requirements could disproportionately affect Sarawak's SMEs. Ong stressed that practical implementation is critical to avoid hurting local economic activity.
Next steps
The government is expected to release more details on tax reform proposals in upcoming budget announcements. SME Sarawak plans to submit formal recommendations to the Finance Ministry.
Ong said the association will continue to advocate for SME-friendly tax policies. He urged the government to prioritize simplicity and clarity in any new measures.