With the ongoing discussion of incorporating Goods and Services Tax (GST) features into the current Sales and Service Tax (SST) system, Ng Sue Lynn, Head of Indirect Tax at KPMG in Malaysia, highlighted that the Government can retain SST while adopting selected GST features, particularly input tax credits (ITC) mechanism, to help reduce tax cascading and improve efficiency.
She also pointed out that allowing qualifying business-to-business (B2B) transactions between registered businesses without charging SST upfront, supported by e-invoicing, could help reduce refund issues, verify transactions, and create a digital audit trail. However, she cautioned that ITC alone may not increase Government revenue, as this would also depend on the tax base and tax rates.
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