20/08/2026

THURSDAY | AUG 20, 2026

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Experts split over proposed SST-GST hybrid system o Govt urged to look beyond taxation to resolve fiscal challenges

M’sians snub vacancies in 3D sector: Minister PUTRAJAYA: Tens of thousands of vacancies in the dirty, dangerous and difficult (3D) sectors attracted only 352 applications from Malaysians, prompting the government to proceed with plans to bring in foreign workers to fill the manpower gap. Human Resources Minister Datuk Seri Ramanan Ramakrishnan said the figures showed Malaysians continue to be given priority to take up such jobs, with foreign workers considered only after efforts to recruit locals fail. “Take the 3D sector, for example. The requirement is in the tens of thousands. “All the vacancies were advertised and displayed on the MYFutureJobs website. Do you know how many applications we received? 352,” he told reporters after the Human Resources Ministry monthly assembly yesterday. He was responding to calls from an NGO for the government to defer its decision to recruit 15,000 foreign workers for 3D jobs and instead consider employing stateless individuals in Malaysia. Ramanan said the existing mechanism was designed to ensure that Malaysians were given priority for available jobs before employers could turn to foreign workers. “After the job is offered through MYFutureJobs and there are no Malaysians willing to take up the opportunity, only then do we give it to foreign workers, refugees or anyone else.” The government had earlier approved the recruitment of 15,000 foreign workers for the 3D sectors amid continued labour shortages. Ramanan said the government had to balance efforts to prioritise Malaysian workers with the need to ensure industries had sufficient manpower. “There is a lot of demand for workers. But we have to do what is best for our people and our country.” On calls to employ refugees and stateless individuals to fill the vacancies, Ramanan said the government already has a mechanism for recruiting workers and would continue to follow the established process. He added that the issue had also been discussed by the Cabinet, which had reaffirmed the policy of prioritising Malaysians for available jobs. Ramanan also said the ministry was studying the review of the minimum wage carefully, adding that any decision must take into account its wider impact on workers, businesses and the economy. He said the National Wages Consultative Council would first deliberate on the matter before submitting its findings to him. He added that he would then bring the recommendations to Prime Minister Datuk Seri Anwar Ibrahim for consideration and approval. “We cannot take any steps without calculating everything properly. “Because if we make even a slight mistake, it could create a very big problem that would be difficult to control.” Ramanan said the ministry would table two worker-related schemes at the next Parliament sitting, including Skim Pengembara, which is aimed at extending social protection to about 450,000 Malaysians commuting to Singapore for work, and a maternity related social protection scheme. – By Harith Kamal

tax-collection machine, it needs fiscal discipline.” He proposed that any future GST reform should be revenue-neutral, with additional consumption-tax revenue offset by reductions in other, more distortionary taxes. However, economist Prof Geoffrey Williams took an opposing view, saying the government was right to resist a return to GST because of its impact on consumers. “Anwar is right to oppose GST because it is regressive,” he said, adding that GST raises more revenue largely because it taxes more people and a wider range of goods and services. Williams added that the input-credit mechanism meant GST was ultimately borne by consumers at the point of final consumption. “The cost falls almost completely on consumers. This is why it is regressive. “It will cause higher prices across more goods and services and more people will be worse off as a result.” He instead proposed an electronic payments tax (EPT) as an alternative, adding that a very small levy on transactions made through cards, QR payments and e-wallets could generate substantial revenue. He said a 1% EPT could potentially raise RM28.8 billion, while a 2% rate could generate almost RM60 billion. Williams said Malaysia needed to rethink traditional consumption taxes as the economy becomes increasingly digital. “In a world where most people are using e-payments, we need new taxes, not SST or GST, which are old-style taxes not fit for purpose in the current business environment.”

Datuk Seri Anwar Ibrahim said the government was prepared to study incorporating certain GST features into the existing SST framework to make Malaysia’s tax system more progressive. Anwar, who is also Finance minister, emphasised that SST would remain the basis of the country’s taxation system and that he would not compromise on avoiding a tax that broadly affected the population. He added that his fundamental concern with GST was that it was a broad-based tax that could place an additional burden on the public, particularly amid current cost-of-living pressures. Malaysia introduced GST at a standard rate of 6% in 2015 before abolishing it in 2018 and reverting to SST. Ferlito said trying to make SST more efficient while keeping most consumers outside the tax net would be difficult because the strength of a consumption tax comes from having a broad base. He also said numerous exemptions and special rates could instead make the system harder to understand and administer, while creating distortions and encouraging businesses to lobby for preferential treatment. He added that a simpler GST, accompanied by lower income taxes and targeted assistance for vulnerable households, would be preferable if the government wanted to pursue consumption-tax reform. Ferlito urged the government to look beyond taxation when addressing its fiscal position, saying increasing revenue alone would not solve the underlying fiscal challenges. “Malaysia does not simply need a better

█ BY HARITH KAMAL newsdesk@thesundaily.com

PETALING JAYA: The government proposal to retain the Sales and Service Tax (SST) while using selected features of the Goods and Services Tax (GST) could end up recreating the very system it is trying to avoid, said Centre for Market Education CEO and economist Dr Carmelo Ferlito. He said the proposal was understandable from a political standpoint but questioned whether a hybrid system could deliver the efficiency of GST without eventually becoming a GST-like system. “I understand the political motivation. But economically, I am sceptical. “GST was a structurally better tax than SST because it was broader, more transparent and less distortive across production chains.” Ferlito said the main advantage of GST was its input-tax-credit mechanism, which allows businesses to offset tax paid on inputs against tax collected from customers. “Once you introduce that systematically, you are essentially rebuilding a GST or Value-Added Tax system. “There is a limit to how much GST efficiency could be imported into SST without turning it into GST.” His comments came after Prime Minister Tabung Haji depositors laud RCI disclosure KUALA LUMPUR: Depositors of Lembaga Tabung Haji (TH) described the disclosure of the Royal Commission of Inquiry (RCI) report as an important and brave step by the government to restore integrity, governance and public confidence in the institution. Bank executive Anis Atifah Che Rawi, 39, who has been a depositor since the age of 25, welcomed the disclosure as it allows depositors to understand the real situation and ensures that arising issues could be addressed fairly and transparently. “The report is important to understand what is really happening. “As a depositor, I hope the issue could be addressed transparently and fairly so that public confidence in TH remains intact.” Commenting on the government assurance regarding the safety of depositor savings under the Tabung Haji Act 1995, she said the measure provides peace of mind to contributors while demonstrating the government’s ongoing commitment to protecting the interests of Muslims. She also expressed support for continuous legal action against any party found to have committed misconduct and expressed hope that the management of TH would continue to be strengthened in the future. “I agree with the actions taken. If there is any misconduct, the matter needs to be investigated according to the law. “What is important is that the management needs to be continuously strengthened so that the confidence of depositors is maintained.” The same view was shared by Pertubuhan Mesra Pengguna Malaysia deputy president Azlin Othman, 49, who considered the RCI disclosure as an important turning point to

Azlin said strict enforcement actions against those suspected of misconduct are appropriate measures and expressed hope that the cleaning and improvement of TH governance would be carried out without any political interference. – AMIRUL SYAFIQ/THESUN

the RCI report allows the real problems to be identified and corrected for the future of the institution. The single father said the full government guarantee under the TH Act provides strong assurance that depositor savings remain safe. “Honestly, I felt disappointed when I found out that the savings of Muslims were managed with such weaknesses. “But I am now relieved because finally, the issue has been opened transparently. At least we know the real problem and can fix it, instead of just covering it up.” Raja Mustaffa also praised the asset recovery and restructuring measures taken to ensure that TH’s investment management is more transparent, professional and monitored by an independent body to prevent past mistakes from recurring. – Bernama

cleanse the management of the institution. Azlin, who has been a TH depositor for 31 years, said she felt relieved because the truth about the previous governance weaknesses has finally been revealed openly and is no longer being covered up. “I was disappointed and shocked when I read about how badly TH was managed before. However, I am also relieved because finally, the truth has come out, not hidden anymore.” She added that strict enforcement actions against those suspected of misconduct are appropriate measures and expressed hope that the update and improvement of TH governance would be carried out without any political interference. Meanwhile, a solid waste disposal contract worker who only wanted to be known as Raja Mustaffa, 40, said the transparent disclosure of