Expanded SST: Is Banking Services Affected? What will be Taxed?

Malaysia’s 8% Service Tax (SST) on financial services is set to begin 1 July 2025, but rest assured — your routine banking isn’t affected, says a joint statement from the Association of Banks in Malaysia (ABM), Association of Islamic Banking and Financial Institutions Malaysia (AIBIM), and Malaysian Investment Banking Association (MIBA).

Is Everyday Banking Affected?

Short answer: No

Basic, day-to-day banking services — like savings and current account transactions — are explicitly exempt from the 8% SST. ABM affirms that no new tax will apply to core services used by individuals and households.

Which services remain TAX-FREE?

(SST Expansion 2025) 6 New Taxable Services ~ Who Pays, Who's Exempt?

Brace yourselves, Malaysia – your service tax landscape is shifting dramatically on July 1, 2025. The Government's expanded Sales and Service Tax (SST) isn't just a tweak; it's a massive overhaul targeting 6 new service sectors.

Leasing that equipment?

Building that project?

Paying for premium private school or a spa day?

Get ready 👀

The long-anticipated expanded SST is finally here, bringing services like leasing, construction, finance, private healthcare, education, and beauty under the tax net. 

Designed with precision, these changes aim to boost national revenue while shielding everyday Malaysians and SMEs – but businesses in these sectors must act fast.

Stay tuned: we break down exactly who pays, who’s exempt, and the crucial thresholds you need to know.

Here is a summary of the 6 new categories of services subject to the expanded Service Tax (SST) effective 1 July 2025: