KCCI Calls for Review of Outdated Stamp Act 1949

26 May 2025

KOTA KINABALU: The Federal Government has been urged to review the Stamp Act 1949, which is seen as outdated and out of touch with current socio-economic realities, especially for small businesses and rural communities.

Kadazandusun Chamber of Commerce and Industry (KCCI) Supreme Council Member Dennison R. Indang said that despite numerous amendments, the Act remains rooted in colonial-era frameworks that impose rigid penalties and complex compliance requirements.

“In Sabah, many transactions including family-based rental agreements, small community business contracts, and personal loans are often informal in nature and now risk facing disproportionate enforcement.

“Many individuals are penalised not because of wilful evasion, but due to a lack of awareness and limited access to proper legal resources. The current structure of the Stamp Act offers little flexibility to accommodate these situations,” he said in a statement today.

To address these issues, Dennison proposed several key reforms. These include exempting or significantly reducing stamp duty for small-value transactions, particularly those below RM10,000, to ease the burden on low-income groups and microenterprises.

He also called for the introduction of a first-time non-compliance amnesty mechanism, especially for cases that arise from a lack of information rather than deliberate evasion.

In addition, Dennison suggested devolving stamp duty processing powers to the governments of Sabah and Sarawak, to allow for more context-sensitive and people-friendly implementation.

He further proposed the development of user-friendly digital platforms with bilingual guidance in Bahasa Malaysia and English, supported by accessible assistance channels tailored for rural communities.

Lastly, he called for the establishment of a Parliamentary Select Committee to reassess the scope and direction of the Stamp Act 1949, with participation from a broad range of stakeholders, especially from Sabah and Sarawak.

“As a representative of the business community, I believe our tax laws must be just, practical, and inclusive. They must empower, not punish, those who are trying their best to comply.

“The country must move beyond the legacy of 1949 and adopt a legal framework that supports a just and forward-looking Malaysia,” Dennison stressed.

Under the Stamp Act 1949, employment contracts are considered chargeable instruments as listed in the First Schedule.

Currently, contracts involving monthly wages below RM300 are exempt from stamp duty. However, this threshold is widely seen as outdated, especially in light of Malaysia’s minimum wage of RM1,700.

Stamping an employment contract costs RM10 per copy and must be done within 30 days of signing and failure to comply may result in a penalty of up to RM100 for each document.