Analysis: Migration towards STSDS on track

KUCHING (Dec 26): Malaysia’s move towards a self-assessment regime for stamp duty from Jan 1, 2026 comes as the stamp duty remission on Bursa Malaysia share trading remains in force until July 12, 2028.

The Inland Revenue Board (LHDN) on Dec 19, 2025 launched the stamp duty self-assessment system via the MyTax portal to make preparations for the rollout of the Sistem Taksir Sendiri Duti Setem (STSDS).

The reform will see stamp duty administered through a fully digital, centralised e-Stamp Duty platform.

Under the STSDS, LHDN said stamp duty assessment will be implemented in phases beginning Jan 1, 2026 to improve administrative efficiency and encouraging voluntary compliance.

With this transition, the existing Stamp Assessment and Payment System (STAMPS) will be fully discontinued on Dec 31, 2025, with all stamping transactions migrated to the new platform.

LHDN also said that it will not impose penalties during the first year of STSDS for applications submitted between Jan 1 and Dec 31, 2026 to ease duty payers into the new regime.

The concession covers errors in Stamp Duty Return Form (BNDS) submissions, inaccurate information affecting stamp duty assessments and offences identified under subsection 72D(2) of the Stamp Act 1949.

Alongside this, the stamp duty on share trading on Bursa Malaysia remains at 0.10 per cent of contract value, capped at RM1,000 per contract, under the Stamp Duty (Remission) (No. 3) Order 2023.

The remission applies to contract notes for the sale of shares listed on Bursa Malaysia executed between July 13, 2023 and July 12, 2028, reversing the earlier increase to 0.15 per cent introduced in 2022.

The order was gazetted on July 12, 2023, and was part of the government’s broader effort to lower transaction costs and improve the competitiveness of Malaysia’s capital market.

Back then, Prime Minister Datuk Seri Anwar Ibrahim said the lower stamp duty would reduce trading costs, support market liquidity and strengthen Bursa Malaysia’s appeal to both domestic and foreign investors.

He added that improved liquidity could encourage more small and medium enterprises to pursue initial public offerings and help listed companies raise funds for expansion and job creation.

Under the remission order, stamp duty payable under Item 31(a) of the First Schedule to the Stamp Act 1949 is reduced to 0.10 per cent, with any amount exceeding RM1,000 per contract remitted.

The relief applies only to shares listed on Bursa Malaysia and does not extend to unlisted shares or other marketable securities such as debt instruments and warrants.

Kenanga Investment Bank Bhd (Kenanga Research) in a June 2023 note said the lower stamp duty was positive for overall trading activity especially for retail investors who are more sensitive to transaction costs.

However, it also noted that market participation would still depend on broader factors such as economic conditions, inflationary pressures and currency movements.

The research house added that the stamp duty reduction does not affect Bursa Malaysia’s earnings directly, as the exchange does not receive stamp duty collections, though higher trading volumes could provide indirect support to market activity.