NEGOTIATIONS in the ongoing Malaysia Agreement 1963 (MA63) talks have reached an impasse over one key sticking point – Sabah and Sarawak’s share of stamp duty collection.

“It’s on the rocks,” a source with knowledge of the discussions told The Malaysian Insight.

The Finance Ministry reportedly would not budge on its insistence that all stamp duty collected anywhere in the country belonged to the federal government.

Sarawak Chief Minister Abang Johari Openg, at the second meeting of the main steering committee on the MA63, reportedly raised the issue of Sarawak’s share of the stamp duty as part of the state’s push to review the financial provisions of Article 112D and Article 112D (3) of the federal constitution.

Sabah and Sarawak have long fought for their share of stamp duty collection, seeing it as much-needed additional revenue.

“Sarawak argued the stamp duty collected in the state belongs to the state because it is charged on instruments in transactions,” the source said.

“The Finance Ministry, however, insisted that it is the federal government’s to keep.”

The meeting of the steering committee, chaired by Prime Minister Dr Mahathir Mohamad earlier this month, failed to reach a consensus, and pushed the issue to the second-tier technical committee to sort out.

The source said the technical committee, at its meeting on March 25, had also failed to break the deadlock, pushing it to the state and federal attorney-generals to iron out.

The impasse is expected to be a key topic at today’s meeting of Sarawak’s bipartisan Consultative Committee.

The consultative committee, made up of assemblymen from across the political divide, include three from the opposition Pakatan Harapan – See Chee How (PKR-Batu Lintang), Ali Biju (PKR-Krian) and Irene Chang (DAP-Bukit Assek).

The meeting, to be chaired by state legislative assembly Speaker Mohd Asfia Awang Nasser, is scheduled for this afternoon at the state assembly building.

The stamp duty is a tax levied on certain transactions, written instruments and documents that have financial, legal or commercial implications.

Documents and instruments require to be “stamped” include sales and purchase agreements, tenancy agreements and, since 2009, service agreements.

There are two types of stamp duties – fixed duty and ad valorem duty. 

Fixed duty refers to stamp duty payable at a fixed amount, while for ad valorem duty, the amount payable varies depending on the type and value of the instruments.– March 28, 2019.