Consumers want GST zero-rated banking

KUALA LUMPUR: Consumer groups are up in arms over reports that banking services including ATM withdrawals, online transactions including interbank Giro fund transfers and over-the-counter services will be subject to 6 per cent Goods and Services Tax (GST) come April 1.

These services are not subject to the Sales and Services Tax (SST) and considering that the GST is a replacement tax for SST, those goods and services previously untaxed should continue to be zero-rated. Unfortunately, as the reports go, it’s too late for the Customs Department to exclude banking services.

Federation of Malaysian Consumers Association (Fomca) chief executive officer Paul Selvaraj thinks that banks should absorb the 6 per cent GST for banking services. “They are the ones who keep promoting online banking, so if GST is still going to be imposed on these services, the banks should absorb it,” he said. “Nothing is cast in stone.”

Taxing basic banking services would affect every individual, said Malaysian Employers Federation executive director Shamsuddin Bardan. “Banking is an essential service used by everyone.”

“This would create uneasiness among banking customers if implemented. If the government is promoting going cashless, they should not tax basic services such as these.”

The Finance Ministry, in a media statement on Wednesday, confirmed the government was going ahead with GST on April 1, despite calls for its deferment. “Any delay will only negatively impact Malaysia’s credit rating as the GST introduction is a vital fiscal consolidation measure to ensure the national economy’s sustainability,” the statement said.

The one-day event was organised by the Successful Young Generation Entrepreneurs Organisation (GMB), an NGO for young Malaysian entrepreneurs.

About 100 participants took part where they were given talks on GST, business ideas, business loans and heard testimonies from members of GMB.

According to GMB President Agil Faisal Ahmad Fadzil the NGO is touring the nation in its effort to encourage its members to register their businesses before GST is implemented on April 1 this year.

"We are also having a membership drive and I am happy to say that many of our members are very successful in their respective fields. We are a network of highly-motivated young people and we want to expand our networks further," he said.

Sabah was GMB's fourth stop after touring Selangor, Kuala Lumpur and Penang.