If you are looking for something riveting to read, know that Malaysia’s Stamp Act 1949 is the antithesis of all that is joyful.
Chances are the instruction pamphlet that came with the blender gifted to your wife would be more thrilling.
That said, the Act is a federal legislation every affected person should be acquainted with. It provides clear guidelines and calculation methods for how the Collector of Stamp Duty (CSD) levies charges for documents that need to be stamped.
That information is extremely useful for detecting discrepancies committed by the CSD, should they occur.
Believe me, it does happen – especially when CSD officers decide that they will ignore clear statutory provisions in the Act and simply take advice from the many voices within themselves, which is probably hinged on the need to meet certain key performance indicators before the end-of-year bonus can be given.
Anyway, in regard to that statutory provision, it is important to be familiar with the First Schedule of the Act, which essentially provides the complete list of what documents can be stamped and for how much.
It is not my aim here to go through the complete list, but to illustrate just two examples.
Now, a Declaration of Trust, which comes under item 37 of the First Schedule, and a Power of Attorney, which comes under item 59 of the same, attract a RM10 stamp duty each, and that has always been the position since I joined legal practice in 1997.
This, I believe, is the correct application of the law, as it strictly follows the literal wording of the First Schedule.
However, of late, some CSD departments across varying states have treated a Declaration of Trust and a Power of Attorney as transfers of immoveable properties (transfers), thereby levying costly ad valorem stamp duty on each as per item 32 of the First Schedule. This is egregious for two reasons.
The first reason rests on the fact that the method for calculating stamp duty should be uniformly applied and should not depend on which CSD department you go to, or more specifically, which CSD officer is assigned to process the adjudication. The stamping of documents is exclusively a federal purview governed by very clear statutory guidelines (as mentioned), and is not a state prerogative nor dictated by the inner voices often vexing the corridors of the CSD.
As for the second reason, transfers (of immoveable assets) can only be legally effected by using Form 14A, a statutory prescribed form provided under sections 215 and 217 of the National Land Code 2020.
Thus, in so far as transfers are concerned, the Stamp Act must not be read in isolation but in consonance with the National Land Code.
In that same light, a Declaration of Trust and a Power of Attorney are not instruments of transfer as recognised under the National Land Code and therefore must not be treated as such.
This wave of arbitrary interpretation and application by the CSD pertaining to the First Schedule has perpetuated a running joke among lawyers: that in the aftermath of the financially crippling 1Malaysia Development Berhad scandal, the Malaysian government had no choice but to become creative in its need to raise revenue, and in that, tacitly authorised their federal collection agency to treat most, if not all, documents required to be stamped as transfers.
On a serious note, this bureaucratic farce is perhaps one of the reasons why governments get overthrown at general elections – the enraged public outcry and frustrations against the incessant federally sanctioned hardships which stem not from law or sound judgment but from caprice.
The views expressed here are the personal opinion of the writer and do not necessarily represent that of Twentytwo13.