If you notice a small bump in your bank charges starting today (July 1, 2025), don’t panic.
It’s likely due to a new 8 percent service tax that just kicked in.
This isn’t something banks are doing quietly. It’s part of a government move to expand the service tax to cover more services, and this time it includes certain financial services.
So, what exactly is affected, and should you be worried? Let’s break it down.
Not everything gets taxed. Only certain services
First of all, the 8 percent tax doesn’t apply to everything.
You won’t get taxed just for having a bank account or doing normal things like checking your balance or withdrawing cash.
This new service tax only applies to specific services that come with extra fees or commissions.
Here’s a quick rundown of what’s now taxable:
- Investment transactions
- Transferring money across borders
- Requesting special reports (like audit confirmations)
- Getting financial advice from your bank
These are more specialised services, so if you don’t usually use them, you probably won’t be affected much.
Your basic banking is still safe
The good news is that everyday banking remains tax-free.
This includes:
- Savings and current accounts
- Basic services offered by conventional or Islamic banks
- Regular account maintenance
These exemptions are meant to make sure low- and middle-income customers are not financially burdened by the new policy.
Why is this happening now?
This move is part of a larger plan to boost the country’s revenue without impacting average Malaysians too heavily.
By taxing non-essential or premium banking services, the government hopes to collect more tax from those who can afford it, without increasing costs for everyone.
It also supports Malaysia’s medium-term fiscal goals, which focus on reducing national debt and strengthening long-term economic stability.
What should you do now?
If you use banking services beyond the basics, here are a few things to keep in mind:
- Check your bank’s website or app for updated service fees
- Look out for official announcements from your bank
- Monitor your bank statements starting today
Banks are rolling out information gradually, so staying informed will help you avoid any unexpected charges.
Summary
- The 8 percent service tax takes effect today, July 1
- It only applies to specific services involving fees and commissions
- Basic banking services are not affected
- Customers are advised to check with their banks for the latest updates
- This move is part of a broader national strategy to increase tax revenue without burdening lower-income groups
Source: The Malaysian Reserve
