Banking, financial sector sees little impact from GST

PUTRAJAYA: The implementation of the Goods and Services Tax (GST) on banking and financial sector will have minimal impact on consumers, said Senior Assistant Director of the Royal Malaysian Customs Department (Banking and Finance), Rozila Saad.

Speaking to reporters here today, she said the new tax would only be imposed on fees in every banking transaction and not on the amount of the transaction.

Most banks and finance companies were ready to implement the GST, she added.

“The impact on this sector is rather small as most of the activities carried out are exempted except for transactions that are based on fee only,” she said at a media briefing ahead of the GST implementation this Wednesday.

A total of 12 activities under the banking and financial sector were exempted from GST including account and loan operations, said Rozila.

However, interbank transactions will be subjected to the GST. “Transaction fees will depend on the banks but GST will be imposed. Other than Malaysian-based banks, the charges will be higher. GST will be imposed on transaction charges, not the amount,” she said.

She added that investments as well as holdings on bonds and financial instruments were also exempted from GST, while for MEPS services, GST would only be imposed on the transaction charges.

She said transactions involving credit and debit cards would also be exempted from GST, but the annual credit card fees would be subjected to the new tax.

Rozila said life insurance was also exempted from GST while general insurance will be subjected to the tax. GST would not be imposed on road tax, she added. --BERNAMA