10 hours ago
- Business
- Free Malaysia Today
Service tax expansion won't affect everyday services, say banking groups
The tax revision would not affect services such as savings, e-wallets, credit cards or ATM transactions.
PETALING JAYA : Three major banking associations have assured Malaysians that everyday banking services will not be affected by the upcoming expansion of the service tax on financial services.
The Association of Banks in Malaysia (ABM), the Association of Islamic Banking and Financial Institutions Malaysia (AIBIM), and the Malaysian Investment Banking Association (MIBA) said the revised scope, which will take effect on July 1, would only affect selected corporate, treasury and investment banking services.
They said that essential consumer services involving fees or commissions, such as those related to current or savings accounts, e-wallets, or credit cards, would be exempted from the service tax.
Services such as cash deposits, withdrawals, payments, local fund transfers, debit card issuance and related annual fees, and ATM or branch transactions like bill payments or statement printing remain exempt from the service tax.
'These are considered essential banking services and remain out of scope for service tax purposes,' the associations said in a joint statement.
They also confirmed that interest, profit-based charges, penalties, and credit card annual fees would not be affected.
These exemptions, they said, are meant to ensure that routine banking for individual consumers remains untouched by the expanded tax framework.
'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 said.
Customers unsure of how the expanded tax scope affects them have been urged to contact their banks directly.
'The banking industry will continue working with relevant authorities to ensure this transition is handled clearly and responsibly,' they said.
