FMM calls for stamp act update to reflect modern employment practices
Tan Sri Dato' Soh Thian Lai
KUCHING (June 7): The Federation of Malaysian Manufacturing (FMM) has urged the government to consider regularising and updating the First Schedule of the Stamp Act 1949 to reflect current economic and business realities.
FMM president Tan Sri Dato' Soh Thian Lai said the federation recommends increasing the threshold for stamp duty exemption on employment contracts from the current RM300 to RM10,000, in line with modern salary benchmarks and industry norms.
'We call for a comprehensive review of the Stamp Act 1949, particularly in relation to the classification of employment contracts and appointment letters as instruments subject to stamp duty,' he said in a statement today.
Soh further urged the Finance Minister to exercise his powers under Section 80 of the Stamp Act 1949 to make the necessary changes by way of subsidiary legislation, without the need to table amendments in Parliament.
According to him, this approach will enable a timely and effective update to the law, ensuring that it remains practical, business-friendly and aligned with current employment practices.
He expressed appreciation to the Finance Ministry and the Inland Revenue Board of Malaysia for their 'prudent and considerate decision' to exempt employment contracts executed before Jan 1 this year from stamp duty, and for remitting penalties on all late stamping for such contracts.
This decision, he said, is a significant relief for employers, especially in the manufacturing sector, as it addresses the concerns raised by FMM in its engagements with the government.
'It recognises that the requirement to stamp employment contracts was not widely known or enforced in the past, and that penalising past non-compliance would have created an unnecessary burden on businesses,' he said.
He said FMM also welcomed the further decision on the remission of penalties for any non-compliance involving contracts executed during the 2025 transition year, provided these are stamped before Dec 31 this year.
Deferring the full implementation of the regulation to be effective only from Jan 1 next year is an excellent and pragmatic move, lauded Soh.
He said it provides a much-needed adjustment period for employers while also paving the way for the Finance Minister to update the regulation under the Stamp Act 1949 without retroactive implications. employment Federation of Malaysian Manufacturing lead soh thian lai stamp
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