Kuala Lampur, June 30 -- On July 1, 2025, Malaysians will begin paying more for a range of services as the government raises the Sales and Service Tax (SST) from 6 per cent to 8 per cent.

Framed as part of the Madani Government's broader fiscal reform efforts, this move is projected to generate an additional RM3 billion annually.

However, a deeper look reveals that this is less about meaningful reform and more about plugging short-term fiscal gaps. The SST hike may be the most visible tax adjustment since the Goods and Services Tax (GST) was repealed in 2018, but it is not a structural solution to Malaysia's longstanding fiscal challenges.

The government justifies the increase by pointing to Malaysia's low tax-to-GDP ratio - about 11.8...