Umno pushes for GST reinstatement, dismisses hybrid tax approach

Umno president Ahmad Zahid Hamidi has reiterated his party's preference for reinstating the goods and services tax, arguing for implementation at a more reasonable rate than previously applied. The statement represents Umno's formal rejection of hybrid tax arrangements that would combine GST with the existing sales and service tax framework.

Hamidi's position reflects ongoing debate within Malaysia's political and business circles over the most effective tax structure for the nation's economy. Umno has signalled that a properly calibrated GST would be preferable to maintaining the current dual-tax system or adopting compromise models that blend both approaches.

The goods and services tax was previously implemented in Malaysia before being replaced by the sales and service tax in 2018. The debate over tax policy remains a contentious issue as the government considers various options to streamline revenue collection and improve economic efficiency.

Umno's stance suggests the party believes a single, well-designed consumption tax would offer clearer benefits than maintaining multiple tax instruments or creating a combined system that could complicate compliance and administration.