Malaysia · Proposed legislation
Malaysia proposes RM10 stamp-duty cap for second-tier supplier financing
On 9 October 2026, Malaysia’s Prime Minister and Minister of Finance, Anwar Ibrahim, proposed RM10 stamp-duty treatment for qualifying second-tier supplier-financing agreements in Budget 2027.
- Official document:
- Budget 2027 Tax Measures, Appendix 22; Stamp Act 1949 (Act 378), section 80
- Development date:
- 2026-10-09
Relief targets the second financing instrument
Appendix 22 proposes remitting duty exceeding RM10 on agreements between mid-tier companies and financial institutions for the use of excess credit facilities to provide early payment to MSME suppliers. The proposed window is 1 January 2027 to 31 December 2030, determined by execution of the second-tier agreement.[1]
The Budget describes this supplier-financing programme as reverse factoring, with two instruments: the first-tier credit-facility agreement and the second-tier agreement to utilise excess credit. Both are between the mid-tier company and a financial institution. The proposal does not reduce the first-tier charge, which Appendix 22 says would remain at 0.5%.[1]
External suppliers, not an intra-group funding concession
Suppliers must have fulfilled contracts to supply goods or services to the mid-tier company. They must not be its parent, subsidiary or related party. These conditions matter to multinational purchasing and treasury teams: qualifying external MSME suppliers are the intended beneficiaries of earlier payment, rather than group affiliates.[1]
A proposal, not an operative remission
The affected duty falls within the Stamp Act 1949 (Act 378). Section 80 in IRBM’s text as at 1 January 2024 distinguishes gazetted relief for classes of instruments from the Minister’s power to grant relief for particular cases or schemes. That dated statutory text does not establish that this proposed supplier-financing remission has already been granted.[3]
The Prime Minister’s speech presents the measure as support for MSME cash flow through bank facilities provided to mid-tier companies. Businesses should therefore distinguish its commercial purpose from its legal implementation: the October Budget is not itself an operative relief instrument. Before applying any remission, check the final eligibility and documentary requirements and the agreement’s execution date. Nothing in this proposal establishes a blanket exemption for every financing or security document connected with a supplier programme.[1][2][3]
Official sources
- [1] Budget 2027 Tax Measures — Appendix 22
Ministry of Finance Malaysia · Document date: 2026-10-09
Full Appendix 22, printed page 29 / PDF page 29, web lines 624–653: reverse-factoring two-instrument structure, proposal, two eligibility conditions, unchanged first-tier duty and execution window. Contents of all 36 appendices also read. No whole-current-law/package clearance claimed.
- [2] Speech: The Fifth MADANI Budget 2027
Prime Minister’s Office Malaysia · Document date: 2026-10-09
Date/actor/presentation lines 38–54 and paragraph 128, web lines 1183–1198: proposed RM10 treatment to support MSME cash flow through bank credit facilities provided to mid-tier companies; second-tier execution period. Broader returned business context read; not full 1,837-line speech.
- [3] Stamp Act 1949 (Act 378) — text as at 1 January 2024
Inland Revenue Board of Malaysia / Laws of Malaysia · Document date: 2024-01-01
Full section 80(1), (1A), (2) and (3), printed pages 74–75 / PDF pages 74–75, web lines 2175–2201. Fresh selected text read. This dated consolidation is not certified as the complete current October 2026 Act or proof of scheme-specific relief; no fresh visual inspection.