No service tax on basic banking transactions under expanded service tax scope
KUALA LUMPUR: Member banks of Malaysia's banking associations will begin implementing the service tax on relevant financial services in phases from July 1, 2025, in accordance with the guidelines issued by the Customs Department.
This follows the recent gazettment of the service tax legislations concerning the expansion of service tax scope, said the Association of Banks in Malaysia (ABM), the Association of Islamic Banking and Financial Institutions Malaysia (AIBIM), and the Malaysian Investment Banking Association (MIBA).
The associations said the imposition of service tax on financial services would be in line with the legislation and relevant guidelines gazetted or issued by the Finance Ministry and the Customs Department.
"Service tax will be imposed at a rate of eight per cent on fee- and commission-based financial services.
"We assure banking customers that several exemptions and exclusions have been granted — for example, basic banking services for the public, including current and savings account-related charges, will remain exempt from service tax for both conventional and Islamic banking services," they added.
For further details, ABM, AIBIM and MIBA advise the public to refer to communications from their respective banks, which will be published via the banks' official channels. - BERNAMA
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