Will current and savings account charges be affected by the new service tax?

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Current and Savings Account Charges Will Remain Exempt from New Service Tax

Basic banking services, specifically charges related to current and savings accounts, will not be subject to the forthcoming service tax on financial services. The service tax, set at a rate of 8 per cent, will be implemented in phases beginning in July and will target fee- and commission-based financial services instead.
Exempt Services Clarified

The Association of Banks in Malaysia (ABM), Association of Islamic Banking and Financial Institutions Malaysia (AIBIM), and Malaysian Investment Banking Association (MIBA) have collectively confirmed that charges associated with current and savings accounts will continue to be exempt. This clarification comes as banks prepare to roll out the new tax.
Scope of the Service Tax

The 8 per cent service tax will be applied to financial services that are based on fees and commissions, aligning with expanded service tax legislation and guidelines from the Ministry of Finance and the Royal Malaysian Customs Department. This legislation broadens the scope of services subject to the service tax.
Phased Implementation and Customer Impact

The phased implementation of the service tax is scheduled to commence in July, with banks adhering to guidelines from the Customs Department to minimise any potential disruption for customers. Customers are advised to consult their respective banks for precise details regarding the application of the service tax.

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Will current and savings account charges be affected by the new service tax?

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