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New Straits Times
3 days ago
- Business
- New Straits Times
LHDN's stamping rule sparks debate
KUALA LUMPUR: The Inland Revenue Board's (LHDN) reported push to enforce the stamping of employment contracts has sparked a wider conversation on the balance between legal compliance and regulatory fairness. While industry experts agree that stamping employment contracts may be a necessary step to align with the Stamp Act 1949, many are calling for the measure to be applied transparently, consistently and with adequate transition measures. Federation of Malaysian Manufacturers recently claimed that there has been an intensified audit since the Stamp Duty Audit Framework was introduced on Jan 1 this year. While there is a legal provision under the Stamp Act 1949 requiring employment contracts to be stamped, it has yet to be widely practised. According to the Stamp Act 1949, employment contracts fall under chargeable instruments listed in the First Schedule. For an employment contract, stamping involves a RM10 fee per copy and must be stamped within 30 days of signing. Failure to do so could result in a penalty of up to RM100 per document. KPMG Malaysia head of tax Soh Lian Seng said this purportedly increased enforcement represents a shift from past practice and may feel sudden to some taxpayers who have operated in good faith under previous norms and practice. Soh said many businesses were not aware that such contracts were considered dutiable instruments, especially given the absence of consistent enforcement or clear prior guidance. "While this could be seen as a necessary step toward ensuring compliance with existing law, it is important that enforcement is applied transparently and consistently. "The retrospective application of penalties may raise concerns about fairness and could undermine trust in the system," he told Business Times. Ultimately, Soh said enforcement and reform efforts must strike a balance between revenue objectives and maintaining Malaysia's appeal as a business-friendly environment. "Sudden or unclear enforcement actions risk creating administrative burdens especially for SMEs, and may erode confidence in the regulatory landscape. "Ultimately, maintaining ease of doing business should remain a central policy focus, as adding administrative requirements without a clear legal basis could create unnecessary challenges for SMEs and growing businesses," he said. Soh urged that stamping requirements be applied prospectively from Jan 1, 2026, giving companies time to align their HR and administrative practices with the law. Meanwhile, the Small and Medium Enterprises Association of Malaysia (Samenta) president Datuk William Ng said the issue goes beyond legal interpretation but it is about operational feasibility. Ng said the sudden shift from a passive regime to active enforcement, coupled with retrospective audits and penalties, is perceived as punitive rather than developmental. "We support the principle of legal compliance and the government's move toward a more self-assessment-based tax regime. "However, changes of this nature require proper transitional arrangements, targeted education and policy clarity to avoid undue burden and confusion, especially when it concerns operational matters like HR documentation. "Many SMEs now face the daunting task of reviewing and potentially stamping hundreds of existing employment contracts, which is neither practical nor proportionate," he said. In addition to the RM10 stamp duty per contract, Ng said the automatic late penalty of up to RM100 per instrument, even if disclosure is voluntary, compounds the financial pressure. Furthermore, he said the requirement to stamp offer letters or confirmation letters within 30 days is impractical. "Many companies issue letters months in advance, and new hires may withdraw or defer their joining, making the process inefficient and wasteful," he noted. At a time when the nation is trying to attract investments, digital nomads, and high-value talent, Ng said this enforcement sends the wrong signal. "It's not just a matter of cost – it's the uncertainty, the complexity and the sense that rules can be changed and imposed retroactively without due consultation. "We urge LHDN to implement a grace period, provide clear written amnesty guidelines for voluntary disclosures, and develop a microenterprise-friendly compliance mechanism," he said. Echoing the views, the Malay Chambers of Commerce (MCC) said such enforcement affected micro traders and small-scale industries as it outlines the rights and responsibilities of audit officers and duty payors, the types of duties and penalties. Its Malay Economy Action Council chairman Norsyahrin Hamidon said the measure was "rushed through, without any thorough comprehensive studies or taking into account workers' plight". Norsyahrin, nevertheless, said MCC agreed with LHDN's approach to educate and encourage compliance to ensure the Act is followed and reduce the burden on penalties or punishment. "However, we hope the education phase reaches the grassroots through the involvement of the chambers before it is enforced and is not just an announcement. "The issues involving cooling off period, waiver mechanism, penalties and punishments need to be clarified as it is confusing. "Among others, the waiver on stamp duty for workers with a monthly salary of RM300 and below is outdated and does not reflect the present salary structure and the labour market," he said. Norsyahrin said MCC was looking for an amicable solution and would like to discuss with relevant agencies, including LHDN and the Finance Ministry to share the concern of Bumiputra traders and to receive a detailed clarification. He said MCC is willing to work with the government and share its concerns with the National Chambers of Commerce and Industry Malaysia, with the view that more time should be given for more companies to be exposed. "At the same time, we urge the government to review the Stamp Duty on Contract Workers and postpone the implementation until the Stamp Duty Act 1949 is reviewed again, " he added. Business Times had reached out to LHDN for clarification on the policy shift, retrospective enforcement, and possible transitional relief measures, but no official response was received as of press time.
Engadget
4 days ago
- Entertainment
- Engadget
Kunitsu-Gami: Path of the Goddess is getting a new mode to coincide with the Switch 2 launch
Capcom just announced that Kunitsu-Gami: Path of the Goddess is getting a new mode to coincide with its launch-day release for the Switch 2, which is June 5 . It's called Otherworldly Ventures and introduces some roguelike mechanics to the action/strategy game. In other words, it's essentially an endless mode. You start off with limited abilities and choose from various upgrades when defeating waves of enemies. Lots of games do something like this, including titles like Vampire Survivors and Downwell . It will also introduce a scoring element, for those who want to ascend a leaderboard. To view this content, you'll need to update your privacy settings. Please click here and view the "Content and social-media partners" setting to do so. To make the roguelike-inspired mechanics work, the developers have simplified other aspects of the gameplay. Protagonist Soh won't have to rescue villagers and crystals will accumulate more quickly than in the standard game. Also, Yoshiro will make her own way to the gate, instead of having to be guided. The whole thing looks pretty fun. Despite launching alongside the Switch 2, Otherworldly Ventures will be available for every version of the game on June 5. This includes PS4, PS5, Xbox One, Xbox Series X/S, Windows and Steam. It's also free, which is always nice. To view this content, you'll need to update your privacy settings. Please click here and view the "Content and social-media partners" setting to do so. For the uninitiated, Kunitsu-Gami: Path of the Goddess is a fun hybrid of third-person combat and tower-defense. We heaped praise on the game in our official review , calling it "perfectly balanced, lovingly crafted and metal as hell."
The Star
6 days ago
- Business
- The Star
‘Supply chains could be disrupted'
FMM cites knock-on effect from extended migrant repatriation programme PETALING JAYA: The extended Migrant Repatriation Programme 2.0 may have a knock-on effect on the nation's manufacturing sector due to disruptions in the supply chain, says the Federation of Malaysian Manufacturers. Its president Tan Sri Soh Thian Lai said while the programme would have little impact on the manufacturing industry as a whole, the sudden exit of foreign workers could disrupt supply chains. 'Our members mostly do not employ undocumented workers due to stringent audit requirements and high compliance expectations from both regulators and international clients. 'But the sudden departure of undocumented workers from other sectors, coupled with the current freeze on foreign worker recruitment, could result in a disruption to our supply chains and have a knock-on effect in various sectors, including manufacturing. 'The government must ensure a continuous and legally compliant supply of foreign workers to meet the needs of businesses and maintain industrial sustainability,' he said when contacted. For the programme to achieve success, Soh emphasised the necessity of implementing it alongside coordinated enforcement, public education and structural reforms aimed at addressing the underlying causes of undocumented employment. 'The misuse of business licences by locals, which enables undocumented workers to operate outside the legal employment system, is also a systemic issue that is unresolved,' he said. Soh suggested the government fast track the anti-Ali Baba law to prevent foreign workers from illegally operating businesses. 'We have consistently highlighted that this law is critical to tackling the root causes of undocumented employment and illegal business operations,' he added. Soh also said that more clarification is needed with regard to plans to allow foreign workers to transfer between employers across sectors. He said the proposal was merely communicated through an internal circular by the Immigration Department and lacked subsequent public clarity and implementation details. 'This has created uncertainty among employers and must be addressed promptly if the government intends for this mechanism to work in tandem with the repatriation programme,' he said. The government initially implemented the programme from March 1 to Dec 31 last year. It allowed undocumented migrants to return to their home countries without facing prosecution by paying a compound fine of between RM300 and RM500. On Friday, Home Minister Datuk Seri Saifuddin Nasution Ismail said the programme would be extended until April 30 next year. Small and Medium Enterprises Association Malaysia president Datuk William Ng said the government should consider legalising undocumented migrant workers if they were already gainfully employed. 'If they entered Malaysia illegally, knowing full well they were going to be working without documentation, why would they surrender themselves?' he said when contacted. Unlike Singapore, Ng said Malaysia doid not have problems with regard to the availability of land for workers' housing. 'It makes little sense to approach the issue of migrant workers as though they are depriving local individuals of employment opportunities. 'They are not, and this is starving our industry of growth,' he said. Kuala Lumpur and Selangor Indian Chambers of Commerce and Industry president Nivas Ragavan said the extension was a welcome move but needed better coordination. 'While digitalisation has helped the process, inconsistent enforcement and sudden changes in requirements often cause delays. 'More coordination between agencies would help,' he said. He also mentioned that there continued to be a shortage, particularly in the semi-skilled and low-skilled sectors. 'The repatriation programme may worsen this in the short term unless it is balanced with streamlined legal recruitment channels.'
Daily Express
20-05-2025
- Business
- Daily Express
Fixing Sabah's financial sinkholes
Published on: Tuesday, May 20, 2025 Published on: Tue, May 20, 2025 By: David Thien Text Size: Brendon said any document of a Sabah GLC or statutory bodies that want to enter into a business agreement with any party have to get the approval of the State Cabinet, after being vetted by his Chamber, besides other relevant authorities. Kota Kinabalu: State Attorney-General Datuk Brenndon Keith Soh said the Sabah Government is very concerned about the loss-making Government-linked companies (GLCs) which have been likened to being 'sinkholes'. He said State Finance Minister Datuk Seri Masidi Manjun is overseeing the matter. Advertisement These GLCs are among 250 that have a primary commercial business development or socio-economic objective and in which the State Government has a direct controlling stake or in a joint-venture stake with a private sector partner(s). Brendon said any document of a Sabah GLC or statutory bodies that want to enter into a business agreement with any party have to get the approval of the State Cabinet, after being vetted by his Chamber, besides other relevant authorities. 'This was a recent guideline,' Soh said at the Sabah Action Body Advocating Rights (Sabar) Town Hall session on Good Governance on Saturday moderated by former Sabah Law Society President Datuk Roger Chin and Sabar organiser Lim Hock Song. 'Any agreement that needs to be approved between the GLC and third party has to go through my State AG's Chambers. Advertisement 'I assure you that I will not let any lopsided agreement through. It is a privilege to serve the State, which is not an entitlement. And I have to look out for what is in the best interests of the State. And the State's interests come first,' Soh stressed. Soh said the State Cabinet has formed an Oversight Committee for GLCs co-chaired by the Permanent Secretary of the Sabah Ministry of Finance and the independent financial advisor to the Chief Minister, Siaw Kok Chee, who was a banker. Among members of the committee are a senior lawyer and a partner of one of the global big four audit firms. 'They are giving their views and inputs. This is a progressive initiative to address the issue,' Soh said. He stressed that the Oversight Committee has Cabinet authority to analyse, investigate any GLC and obtain all financial information required for the probe. Full discourse. 'We recognise that this is part of good governance. We need check-and-balance, oversight, accountability and transparency. 'At the end of the day, if there is bad news, we cannot hide it. We have to be frank and open, otherwise we are culpable ourselves. He said SMJ Energy S/B is a GLC that should be emulated by others where good governance is concerned. Earlier, former banker and Sabah Economic Advisory Council (SEAC) advisor, Datuk John Lo, posed the question, 'Can Sabah afford for the GLCs to continue with the endless poor performance, financial losses, abuses and misgovernance?' 'Of course, GLCs can be turned around,' Lo said, and he was glad that the Oversight Committee was formed with the right people appointed in place in some GLCs. 'Every Sabahan man, woman and every voter, after listening to Sabar's podcasts, should demand from politicians, reformation, transformation and rationalisation of Sabah's GLCs. 'The economic and financial cost of non-performing GLC is excessively high on all Sabahans. Sabar's highlighting of Sabah's GLCs will benefit all Sabahans,' Lo said. * Follow us on Instagram and join our Telegram and/or WhatsApp channel(s) for the latest news you don't want to miss. * Do you have access to the Daily Express e-paper and online exclusive news? Check out subscription plans available. Stay up-to-date by following Daily Express's Telegram channel. Daily Express Malaysia
The Star
16-05-2025
- Business
- The Star
Job contracts stamping rule could hurt SMEs
PETALING JAYA: The requirement for all employment contracts to be stamped by the Inland Revenue Board (LHDN) could impose significant financial and administrative burden, especially on small and medium enterprises (SMEs), say industry players. They said companies with high staff turnover would also be affected. Federation of Malaysian Manufacturers (FMM) president Tan Sri Soh Thian Lai said there has been an intensified audit since the Stamp Duty Audit Framework was introduced on Jan 1 this year. Even though there is a legal provision under the Stamp Act 1949 requiring employment contracts to be stamped, it has yet to be widely practised. He said as such, with the launch of the Stamp Duty Audit Framework, there has been a noticeable increase in audit and enforcement activities across all sectors. 'The requirement under the Act applies to all categories of employment contracts, including full-time, part-time, fixed term and internship agreements. 'Therefore, this affects businesses across all industries,' he said in a statement to The Star. Stamping refers to the payment of stamp duty to LHDN to formally validate specific legal documents. According to the Stamp Act 1949, employment contracts fall under chargeable instruments listed in the First Schedule. However, agreements involving monthly wages below RM300 are exempt though this threshold is far below Malaysia's current minimum wage of RM1,700. For an employment contract, stamping involves a RM10 fee per copy and must be stamped within 30 days of signing. Failure to do so could result in a penalty of up to RM100 per document. According to LHDN, the framework seeks to ensure the audit is carried out in a fair, transparent and impartial manner, by outlining the rights and responsibilities of audit officers and duty payers. Soh said the impact of this move is more severe on companies with high employee turnover or seasonal hiring needs, as they face mounting compliance costs. 'For SMEs already managing tight margins, this can be especially difficult,' he said, adding that larger companies hiring seasonal employees and with a higher turnover rate would also suffer substantial cumulative impact. Soh said FMM has appealed to LHDN for a one-time amnesty on past instruments and the issuance of clear guidelines to help businesses transition to compliance without facing undue penalties. Malaysia HR Forum chief executive officer Arulkumar Singaraveloo also supported the call for an amnesty period. He said there should be a wider awareness campaign on the stamping requirement for employment contracts. Arulkumar also said companies with a large workforce or high employee turnover may face considerable challenges due to the volume of employment contracts that would need to be stamped. He added that it increases the administrative workload. Arulkumar urged LHDN to review its approach, suggesting that the stamping requirement be made voluntary or applied on a needs basis. 'For instance, stamped contracts are not a prerequisite in Industrial Court proceedings or most employment-related disputes. If required, companies could still have the contracts stamped prior to submission to the relevant authorities.'
