Kuala Lampur, Aug. 26 -- This article responds to the recent announcement made by the government that it is prepared to study whether certain features of the goods and services tax (GST) could be incorporated into the existing sales and service tax (SST). The government's willingness to study the proposal is a useful starting point. As no hybrid model has yet been developed, it is too early to determine whether combining GST and SST elements would make Malaysia's tax system more progressive and efficient.

The proposed study is a welcome step towards modernising Malaysia's tax system in response to an increasingly digitalised economy. The study should extend beyond simply choosing between GST and SST. It should consider how consumption ta...