Banks in Malaysia will begin charging an 8% service tax on certain financial services that incur fees and commissions, effective July 1, 2025.
The Association of Banks in Malaysia (ABM), together with the Association of Islamic Banking and Financial Institutions of Malaysia (AIBIM), and the Malaysian Investment Banking Association (MIBA) said the implementation of the tax would be done in stages in line with the guidelines set by the Ministry of Finance and the Royal Malaysian Customs Department (JKDM).
However, this does not mean that the service tax will be implemented on ALL services, and basic services are still exempted from the tax, according to Berita Harian.
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This 8% service tax is only imposed on certain financial services that involve the payment of fees and commissions.
“For example, charges related to savings and current accounts, including for basic services to the public will not be taxed,” ABM explained.
In the meantime, bank customers are also advised to refer to official announcements from their respective banking institutions regarding the details of the implementation of this service tax. Detailed information will be updated through the bank’s official channels to ensure customers are accurately informed of any applicable changes or exceptions.
ABM also said the implementation is part of the expansion of the scope of service tax which was gazetted recently. It is also aimed to broaden the country’s tax base without burdening low-income earners, as well as supporting medium-term fiscal consolidation goals.
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So, what kind of services can bank customers expect to get taxed on?
The implementation of this service tax is expected to impact several types of non-core banking services such as cross-border fund transfers, investment transactions, issuance of special reports, and certain advisory services.
Do refer to your respective bank institutions to understand the service tax further.
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This post first appeared on WORLD OF BUZZ.
