Malaysia’s key banking associations have moved to reassure consumers that essential everyday banking services will remain exempt from the expanded service tax on financial services, set to come into force on 1 July.
In a joint statement, the Association of Banks in Malaysia (ABM), the Association of Islamic Banking and Financial Institutions Malaysia (AIBIM), and the Malaysian Investment Banking Association (MIBA) confirmed that the revised scope of the tax will be limited to selected corporate, treasury and investment banking services.
They emphasised that routine financial services used by individual consumers—including those involving fees or commissions linked to current and savings accounts, e-wallets and credit cards—will not fall within the scope of the expanded tax. Additionally, core services such as cash deposits and withdrawals, payments, local fund transfers, debit card issuance and related annual fees, as well as over-the-counter transactions including bill payments and statement printing, will remain exempt.
“These are considered essential banking services and remain out of scope for service tax purposes,” the associations said, reaffirming their commitment to minimising disruption to the public.
Interest charges, profit-based fees, penalties and credit card annual fees are also excluded from the revised tax framework, in a move designed to ensure that routine financial interactions for individuals are not impacted.
“All banks under ABM, AIBIM and MIBA are committed to transparency. Where the service tax applies, the charges will be clearly indicated and communicated to customers,” the associations added.
Customers with questions about how the changes may affect them are encouraged to contact their respective banks directly. The banking industry reiterated its intent to work closely with relevant authorities to ensure a smooth and responsible transition.
-FMT
