‘Review outdated Stamp Act' call
Published on: Tuesday, May 27, 2025
Published on: Tue, May 27, 2025
By: Mohd Izham Bin Hashim Text Size: Dennison criticised the Stamp Act for its rigid, colonial-era framework, arguing that its punitive measures no longer reflect the realities of today's economy. Kota Kinabalu: The Federal Government has been urged to initiate a comprehensive review of the outdated Stamp Act 1949, which is believed to disproportionately affect small businesses and rural communities in Sabah. 'There is an urgent need to update this law to ensure it is aligned with modern business practices and provide better support for the growth of small and microenterprises, rather than stifling them with outdated penalties,' said Dennison R. Indang, Supreme Council Member of the Kadazandusun Chamber of Commerce and Industry (KCCI). Dennison's call for reform comes in response to the recent imposition of a new stamp duty on job contracts by the Inland Revenue Board (LHDN). In a media statement Monday, he highlighted how this move underscores the pressing need for a law overhaul, noting that small and microenterprises are still burdened by outdated regulations. Dennison criticised the Stamp Act for its rigid, colonial-era framework, arguing that its punitive measures no longer reflect the realities of today's economy. He pointed out that many businesses in Sabah, especially small family-run businesses, operate informally.
Advertisement 'In Sabah, many transactions are informal by nature, including family-based rental agreements, small-scale community business contracts, and personal loans,' Dennison said, who noted such informal transactions are now vulnerable to disproportionate enforcement under the Act. He said that businesses in Sabah, particularly those that rely on informal agreements, are facing significant challenges in complying with the Act's complex regulations. 'The Stamp Act remains rooted in outdated structures that impose significant financial and administrative burdens on small enterprises, particularly those that operate informally,' he added. In response to the negative impact of the Act on small businesses, Dennison proposed several key reforms. First, he called for a reduction or exemption of stamp duty on small-value transactions, particularly those under RM10,000, to reduce the burden on microenterprises and low-income groups. Denisson also suggested the introduction of a one-time amnesty for businesses that failed to comply with the Stamp Act due to a lack of information, rather than any intent to evade taxes. 'We need to allow businesses to correct their past mistakes without incurring harsh penalties,' he said, emphasizing that many businesses may have unintentionally failed to comply due to a lack of awareness. Furthermore, Dennison proposed the devolution of stamp duty processing powers to Sabah and Sarawak, allowing local authorities to apply the law in a more context-sensitive and people-friendly manner. 'Local authorities are better equipped to apply this law in a manner that reflects the unique economic and cultural circumstances of Sabah and Sarawak,' he said. To assist businesses in complying with the law, Dennison also called for the development of user-friendly digital platforms that offer clear guidance in both Malay and English. These platforms would ensure that rural communities have access to the information and support needed to navigate the Stamp Act. Lastly, Dennison called for the establishment of a Parliamentary Select Committee to review the entire scope of the Stamp Act 1949. He suggested that the committee should involve diverse stakeholders, particularly voices from Sabah and Sarawak, to ensure that any reforms to the Act reflect the needs of small businesses in these regions. He noted the Act, which was introduced before Malaysia's independence, enforces rigid penalty structures, complex compliance requirements, and little flexibility — disproportionately affecting ordinary citizens who are often penalised not for wilful evasion, but due to a lack of awareness and access. 'We need a tax system that empowers, not punishes, those who are trying their best to comply.' Dennison concluded by stressing the need for tax laws that are modern, fair, and reflective of Malaysia's current economic environment. 'We are no longer living in 1949. Our laws must reflect a modern, fair, and forward-looking Malaysia,' he said. * Follow us on our official WhatsApp channel and Telegram for breaking news alerts and key updates! * Do you have access to the Daily Express e-paper and online exclusive news? Check out subscription plans available.
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