ABM: SST Not Applied To Transfers, E-Wallets, Card Fees, ATM Use

Basic banking services involving fees or commissions will not be subjected to the Sales and Service Tax (SST), according to a clarification issued by several banking associations on 26 June 2025. This includes charges related to current accounts, savings accounts, and e-wallets.
The notice adds that among the exempted services are fees for cash deposits, withdrawals, payments, and local fund transfers. Transactions conducted at bank branches or ATMs, such as bill payments and the printing of account statements, will also remain tax-free. Additionally, the issuance and annual fees for credit cards are excluded from the 8% service tax, as are interest charges, profit-based charges, penalties, or any other punitive fees.
“These are considered essential banking services and remain out of scope for service tax purposes,” said the joint statement issued by the Association of Banks in Malaysia (ABM), Association of Islamic Banking and Financial Institutions Malaysia (AIBIM), and Malaysian Investment Banking Association (MIBA). It also explained that only certain services in treasury, corporate, and investment banking will be taxed under the first phase of the SST expansion, which comes into effect on 1 July.

The associations assured that all member banks are committed to transparency. “Where service tax applies, charges will be clearly shown, and customers will be clearly informed,” they said.
Customers unsure about how the expanded scope might affect them are advised to contact their banks for clarification and support. “We appreciate the public’s attention to this matter, and we remain committed to open communication with customers. The banking industry will continue working with relevant authorities to ensure this transition is handled clearly and responsibly.”

To recap, the expanded SST framework, first introduced under Budget 2024, officially begins on 1 July 2025 with enforcement starting on 1 January 2026. It is expected to generate RM5 billion annually by targeting non-essential sectors while preserving exemptions on essential goods and services.
The revised structure imposes a five or 10 percent sales tax depending on the category, with basic and local necessities like produce, healthcare products, and educational materials remaining zero-rated. Businesses affected include those in imports, logistics, and retail, all of which are now required to adapt their systems ahead of the enforcement date.
(Source: ABM [official website])
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