Business

Monday September 14, 2009

Deferment of Stamp Duty Act will help, says MBAM

By YEOW POOI LING


PETALING JAYA: Construction players and those in other service industries will have more time to adjust and take the necessary measures to manage their business now that the Government has deferred the Stamp Duty Act until 2011, Master Builders Association Malaysia (MBAM) said in a statement on Friday.

“This deferment will help the industry grow and contribute positively to the economy as the construction sector is considered an important catalyst for the economic recovery,” it said.

The Government had earlier amended the Stamp Duty Act, effective Jan 1 this year, which imposes 0.5% tax on the contract value in ordinary service agreements including construction contracts. The stamp duty rate was previously fixed at RM10.

In earlier reports, MBAM said the new tax regime would result in construction costs rising by between 1% and 2% and it had asked the Government to revert to the fixed rate.

On Wednesday, the finance ministry announced that effective Sept 15 to Dec 31, all service agreements would be imposed a stamp duty of RM50 and after Jan 1, 2011, all service agreements including construction contracts would be levied an ad valorem stamp duty of 0.5% of the total contract sum.

MBAM said it would continue to appeal to the Government to agree to a nominal stamp duty of RM50 for all construction contracts beyond 2011.

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