KUALA LUMPUR: Major banking associations in Malaysia have reassured the public that essential banking services will remain exempt from the expanded service tax set to take effect on July 1, 2025. The clarification comes after the recent gazetting of new service tax regulations.
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 fees linked to basic banking services such as savings accounts, current accounts, and e-wallets will not be taxed.
“These services include fees for cash deposits, withdrawals, payments, and local fund transfers, as well as debit card issuance and annual fees. Transactions conducted at bank branches or ATMs will also remain unaffected,” the statement read.
The associations emphasised that the annual fees for credit or charge cards, along with interest, profit, and penalty charges, will also be excluded from the service tax. The move aims to ensure that everyday banking activities for individuals remain unchanged.
The expanded service tax will primarily apply to specialised financial services such as fund management, investment banking, and trade financing. “Phase 1 of the expansion, effective July 1, 2025, will only cover selected treasury, corporate, and investment banking services as outlined in the service tax guide,” the statement added.
