KUALA LUMPUR (Dec 30): The government will be reinstating the stamp duty cap for share transactions at RM1,000 per contract note, according to a source, marking a change in direction after the previous proposal to remove the cap effective Jan 1, 2022.
The higher rate of 0.15% will however proceed as announced in Budget 2022, compared with the 0.1% rate currently in force, the source said.
During the tabling of the budget, Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz said the proposal to increase the stamp duty rate is among several initiatives to impose a fair tax treatment on the public.
Many quarters, however, have expressed concerns over the plan to remove the cap, as this would result in exorbitant fees being paid when transactions are made, which may have a dampening effect on the bourse.
Bursa Malaysia previously said an estimated 10% of the trade value on the local bourse may be affected by the increase in stamp duty rate to 0.15% from 0.1%.
In November, the bourse said the higher trading cost would make it more difficult for intraday traders to implement their trading strategies, adding that these traders account for 10% of the traded value on the local bourse.
Others have also said the move would deter high-volume traders and speculators, and that while the stamp duty is a good way to increase government revenue, the 0.05 percentage-point hike is deemed too drastic.
Earlier this month, the Association of Stockbroking Companies Malaysia told The Edge that it had met with the regulators to express the industry's concerns over the matter, proposing for the stamp duty rate to be retained at 0.1%, with a slightly higher cap above the current RM200, instead of a complete abolishment.