Malaysia not ready for GST, says Anwar, citing leakages and low wages

Malaysia not ready for GST, says Anwar, citing leakages and low wages



Prime Minister Datuk Seri Anwar Ibrahim attends the Finance Ministry’s monthly assembly in Putrajaya October 15, 2025. — Picture by Sayuti Zainudin

Wednesday, 15 Oct 2025 11:00 AM MYT


PUTRAJAYA, Oct 15 — Prime Minister Datuk Seri Anwar Ibrahim today said Malaysia is not ready to implement the Goods and Services Tax (GST) due to ongoing leakages and low wages in the country.

While acknowledging that GST is a transparent and efficient system, Anwar, who is also the finance minister, recalled that he opposed its introduction when he was Opposition Leader, citing systemic leakages and corruption.

“From a moral standpoint, how can we tax people who are struggling in abject poverty?

“It (GST) was a good system, but it was not the right time (to implement it),” Anwar said at the Finance Ministry’s monthly assembly today.


Also present were Deputy Finance Minister Lim Hui Ying and Treasury secretary-general Datuk Johan Mahmood Merican.

Anwar expressed his gratitude to civil servants in the Finance Ministry and other agencies for preparing the 2026 Budget, which was tabled in Parliament on October 10.

He said the government had to consider several factors — including legacy debts and wide fiscal deficits left by previous administrations — while drafting the Supply Bill.


He also stressed that halting all new borrowings to reduce the fiscal deficit would be unwise, as it could hinder targeted cash aids such as Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (Sara).

“We have successfully reduced the annual government debt from RM100 billion in 2022 to RM77 billion in 2024.

“And we have narrowed the fiscal deficit from 5.6 per cent to 3.8 per cent, but we cannot be too drastic in this,” he said.

Anwar’s remarks came after former economy minister Datuk Seri Rafizi Ramli warned that Malaysia was nearing its debt ceiling of 65 per cent of gross domestic product (GDP) during recent Budget 2026 debates in Parliament.