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Banks assure public of exemptions for current, savings accounts as service tax begins on financial services from July 1
KUALA LUMPUR, June 25 — Basic banking services such as current and savings account-related charges will remain exempt from the upcoming service tax on financial services, the country's main banking associations said today.
The Association of Banks in Malaysia (ABM), Association of Islamic Banking and Financial Institutions Malaysia (AIBIM), and Malaysian Investment Banking Association (MIBA) clarified this when announcing that banks will begin charging the tax in phases starting July.
The service tax, set at 8 per cent, will apply to fee- and commission-based financial services in line with new legislation and guidelines issued by the Ministry of Finance and the Royal Malaysian Customs Department.
The move follows the gazettement of expanded service tax laws that widen the tax scope to include more financial services.
The banking associations have urged customers to refer to official communications from their respective banks for specific details.
They also gave assurance that the phased implementation will follow the Customs Department's guidelines to minimise disruption to customers.
