Language:
Search
 
Stamps Assessment and Payment System (STAMPS)
Inland Revenue Board of Malaysia

A. Problem Analysis

 1. What was the problem before the implementation of the initiative?
The Inland Revenue Board of Malaysia (IRBM) is one of the main revenue collecting agencies of the Ministry of Finance. The function of the Board is to act as agent of the Government and to provide services in administering, assessing, collecting and enforcing payment of income tax, petroleum income tax, real property gains tax, estate duty, stamp duties and such other taxes as may be agreed between the Government and the Board. Stamp duty is a tax that is levied on instruments such as documents on transfer of landed property, securities, transfer of shares, rental and insurance policies. A physical stamp (a revenue stamp) had to be affix to or impressed upon the document or the issuance of an official receipt to denote that stamp duty had been paid before the document was legally effective. Under Stamp Act 1949, there are various methods of stamping such as adhesive stamp, impressed stamp, official receipt, and compound duty and stamp certificate. The main problem that led to the development of the initiative was the time taken to process an application from the stage where the instrument is submitted for stamping until that instrument is indorsed by the authorized IRBM officer. The labor-intensive process begins with the client or authorized agent completing sets of forms and submitting supporting documents together with the instrument/s to be stamped. The IRBM Stamp Office will then process and submit application to Valuation and Property Services Department (VPSD - a department under The Ministry of Finance) to conduct an inspection to value the property, if required. The VPSD will prepare a valuation report, which is sent to the Stamp Office. The Stamp Office will issue a notice of assessment based on the valuation department’s report. Both the Stamps Office and VPSD use either the postal service or personal delivery to route the forms and documents from one party to the other. Notice of assessment was issued manually and posted to respective client or authorized agent. Precious time is lost in the manual process of sending documents through mail besides facing the risk of losing documents in the forwarding processes. Sending documents by hand and phone calls wasted valuable man-hours resulting in unnecessary increase of operational cost. Dissatisfaction was raised amongst the public and business entities pertaining to the time taken in stamping their important documents. The public’s perception was that the system was inefficient and outdated. The lengthy processing time, risks of loss of documents in the mail, human resources management, and time constraints in information delivery, which together translate to the general dissatisfaction from the duty paying public and the relevant parties affected which include legal firms, banks, company secretaries, accounting firms and companies. This situation brings about the urgent need to shorten the processing time of stamping documents in order to enhance the efficiency in the service delivery system, in line with the government policy to create e-government.

B. Strategic Approach

 2. What was the solution?
The initiative is called Stamp Assessment and Payment System (STAMPS). STAMPS was initiated with the aim to improve IRBM’s public service delivery system by offering an alternative method of stamping. It is designed to enhance the current or traditionally manual system of stamping, modernizing and computerizing the stamping process at IRBM stamp offices. The Malaysian government has placed a priority for a better delivery system in the administration of public service. The Special Taskforce to Facilitate Business or PEMUDAH, which was set up by the government of Malaysia was put to task to review the status of the public services delivery system and to propose new policies for improvements. In response to this, the executive management of IRBM through the Stamp Duty Division and Information Technology Department of Inland Revenue Board of Malaysia proposed to develop STAMPS. The main objective of STAMPS is to have a system that assess and collect the stamp duty payable on the instrument which ensures not only speedy revenue collection but also a simple and efficient service delivery system. Fast and accurate assessment on stamp duty to be paid is the main concern to the lawyers, agents and duty payer. VPSD is the official evaluator appointed by the Collector of Stamp Duty in accordance with the Stamp Act 1949. It plays an important part in the stamp duty collection as stamp duty for transferring property is calculated based on the market value of the property or the consideration paid, whichever is the higher. By introducing STAMPS, Notice of assessment which was previously sent through the postal service or hand delivered is now being replaced by a computer generated notice which is printed out from the system. Electronic payment method through Financial Process Exchange (FPX) and internet banking together with the printing of the stamp certificate completes the objective of a wholly computerized system. With the implementation of STAMPS, customers need not come to the Stamp Office for stamping. The whole process of stamping which involves adjudication, assessment and payment of stamp duty is made online. STAMPS caters to both internal and external users. External users are appointed agents such as law firms, banks, companies, agents and VPSD whereas internal users consist of IRBM officers. Each user is given a specific ID and the ID acts as a security tool as well as identification of the user. Selected IRBM officers are also given special IDs to process application for stamping away from the office. One of the important objectives of STAMPS is to curb and reduce fraudulent stamping involving adhesive physical stamp and impressed stamp. The stamp certificate and receipt has high quality security features thus it is difficult to counterfeit. Another key function of STAMPS is in the accounting management. It generates Bank-in- slip (BIS) for online daily account reconciliation. Revenue collection for each day is reconciled by STAMPS before the collection is sent to the bank. Internal users can generate the required statistics and reports at any time. Data from STAMPS will be sent periodically to Electronic Revenue Accounting System (eRAS) for accounts management and to Data Warehouse Application for Enterprise Tax Payer Management System. Apart from this, STAMPS is also integrated with eKL which is an application under MyGovExchange (Malaysian Government Central e-Services). Data delivery is in real time basis.
 3. How did the initiative solve the problem and improve people’s lives?
Through STAMPS, application for stamping can be submitted online through the website https://stamps.hasil.gov.my. Forms are filed electronically. Supporting documents and instruments are scanned and uploaded in the system. Once accepted, an adjudication number will be assigned by the system. When the Stamp Office receives the submission, the documents are transferred to VPSD through online for valuation. The VPSD will key-in the valuation figures and with a click of a mouse, the figures are available to the stamps officer’s view. The applicant is kept updated on the status of the adjudication online. STAMPS has benefited users who have high volume of documents for stamping such as lawyers and agents. The significant reduction in processing time was enjoyed and appreciated by both the internal and external users. Notices of assessment can be viewed online after the assessment has been made. Registered users will be able to print out stamp certificate after payment has been made online via FPX or internet banking. No physical movement of documents is involved in the process. STAMPS does not restrict users to transact during business operation hours. Agents could now transact 24x7 with the stamp offices at their convenience in the comfort of their offices or homes.

C. Execution and Implementation

 4. In which ways is the initiative creative and innovative?
Proposal for the system were initiated by Stamp Duty Division and Information Technology Department of Inland Revenue Board of Malaysia. The initiative was developed to enhance the efficiency in the service delivery system in line with the government policy to promote e-Government. There were few strategies used to implement the initiative. Among them were the setting up of a steering committee, system development committee, system for development and planning committee, pilot and user acceptance test, stress test, training and briefing. To oversee the implementation and success of the project, IRBM formed a Project Steering Committee headed by the CEO of IRBM. The committee member includes Deputy CEO (Tax Operations), IRBM’s CIO, relevant heads of department and user leaders. A committee was formed to oversee and monitor the development of the initiative and to ensure the system progress according to the objective and time specified. The steering committee consisted of officers at the management level of Inland Revenue Board of Malaysia. The committee would also make decisions whether to approve, to reject or to propose alternative solutions if necessary. All approved proposals were officially endorsed by the committee. The system Development Committee consisted of officer from Stamp Duty Division and Information Technology Department. The first pilot run of user acceptance test was set up involving Stamp Duty Offices in the area of Klang Valley. The second pilot run was conducted and extended to all users throughout the country. Stress test was also done to determine the sustainability as well as the ability of the line for the system usage. Training and briefing were held for IRB officers and Valuation and Property Department’s staff as well as legal firms to ensure the success of the system. A help desk was set up to assist in solving problems encountered by the users. STAMPS was developed using a Web service technologies for real time integration and Scheduler method for batch job integration. Each development process initially has to go through with requirement specification until implementation in stages below:- 16 February 2009 - Pilot run on transfer of landed property instrument involving all Stamp Offices in Malaysia. 22 Mei – 6 Jun 2009 - Pilot run involving Eight (8) Stamp Offices in Klang Valley for all instrument. 15 Jun 2009 - STAMPS has been implemented throughout all Stamp Offices in Malaysia for all instruments.
 5. Who implemented the initiative and what is the size of the population affected by this initiative?
The stakeholders of the initiative consisted of the Malaysian Government, appointed agents, Valuation and Property Services Department (VPSD), and IRBM. The Malaysian Government is the main stakeholder as stamp duty is revenue collected by IRBM on its behalf. Speedy and accurate collection of revenue is important. Fast and accurate assessment on stamp duty to be paid is the main concern to the lawyers, agents and duty payer. VPSD is the official valuation authority appointed by the Collector of Stamp Duty in accordance with the Stamp Act 1949. It plays an important part in the stamp duty collection process as stamp duty for transferring property is calculated based on the market value of the property or the consideration paid, whichever is the higher. IRBM, the owner of the system whose main function is to assess and collect the stamp duty payable on the instrument has to ensure not only speedy revenue collection but also a simple and efficient service delivery system. Besides the above mentioned stakeholders, feedback from the main target group for STAMPS were sought during the development stage of the system. The target group includes representatives from legal firms, banks, company secretaries, accounting firms and companies. Inputs from these parties have been taken into consideration in developing a comprehensive and user friendly system. With the user’s convenience in mind, STAMPS was designed with the capability of online submission and supporting documents and instruments that can be scanned and uploaded in the system. The applicant or users will also be able to keep track on the status of the adjudication online.
 6. How was the strategy implemented and what resources were mobilized?
a) Financial Allocation STAMPS is an application which its development started in year 2009 in conjunction with the Ninth Malaysia Plan (RMK-9). The development of STAMPS was carried out by outsourcing it to vendor with the user specification requirement and the technical requirements provided by the IRBM officials from the Information Technology Department and Stamp Duty Division. The whole budget allocation were located for enhancement, development of new request and extension of scope from 1.11.2008 until 28.02.2012. b) Expansion of System Infrastructure STAMPS architecture consists of complex infrastructure namely server, storage, archiving and load balancer to accommodate high volume of transactions and data. • Stage 1 Software used is Oracle using Redhat Linux Operating System. It consists of data migration and hardware requisition. It is base for the development of the computerization and a strategic approached to cater for the overwhelming expansion. • Stage 2 Software used is PHP and Oracles. It is an expansion of system, functionalities in order to cater for the computerization of the whole system. c) System Functionality Enhancement • Application for User ID Before STAMPS, registration for user ID is done manually but in STAMPS registration for user ID can be done online. • System usage Before STAMPS, system for online assessment is only limited to a single buyer/seller transaction for transfer of property only. In STAMPS there is no limitation and the information can be saved and amendment can be done for all types of instruments / transactions. • Coverage Before STAMPS, the coverage is only within Peninsular of Malaysia but with STAMPS, coverage is extended to the state of Sabah and Sarawak in East Malaysia. • Human Resources To provide expertise from various fields including in the area of business, technical and security that relates to the system. o Business Experts consist of external users which comprises of those law firms, agents and Valuation and Property Service Department. Internal user refers to Stamp Offices, Revenue Service Centre and other related department in Inland Revenue Board of Malaysia. o Technical Experts consist of those responsible for the development of infrastructure and for the development of the application. The infrastructure experts provide advice on the system architecture which includes server platform, network environment and security requirement. The application developers will be responsible on the system and data base design based on user requirement. o Security Experts will be responsible in designing the certificate with security features which conforms to the local act and acceptable Digital Signature Act 1997.
 7. Who were the stakeholders involved in the design of the initiative and in its implementation?
a) Functionality Employees of IRBM have adapted themselves to the work culture of using computers to carry out their daily work. Assessors and officers communicate online. Monitoring and management of stamp officers can also be done through STAMPS. Comprehensive reports and statistics generated by the system enable the management to analyze any trouble-shooting as well as formulate policies. With STAMPS, the filing and communication between agents and IRBM officers is done electronically for free which is most valued by the business entities. STAMPS have made business process become simpler and speedier as time is essence and is translated into money. b) Quality Through STAMPS, each application can be viewed and processed in a transparent manner to ensure the accuracy of the assessment. For example, the assessor can view the attached documents as many times as needed to ensure that the data keyed into the system by the user is accurate. The system will calculate the duty automatically. Collector can view the transaction again at the endorsement stage. If there is any error or the duty payer is not satisfied with the duty charged, the assessment can be corrected or a new notice will be issued before any payment is made. Any mistake or error can be traced immediately from an early stage and an appeal can be made instantly. c) Delivery System The success of STAMPS is proven where processing time for stamping is reduced significantly. More applications can be processed as the processing time is shortened. This meets the original objective of STAMPS which is to deliver a better service to the people. Applications and payment can be made at any time without being restricted to the counter operating time i.e. 8.00 am up to 3.30 pm on working days only. d) Cost STAMPS saves time, costs and is environmentally friendly for the following reasons: • IRBM o Paper application forms are replaced by electronic forms. o Notice of assessments is generated by STAMPS. o Notice of assessments are available electronically thus saving postage cost/communication cost. o Save transportation and man power cost to send documents to VPSD/JPPH for ascertaining the value of property. o From the accounting perspectives, accounts management is simplified with electronic payment. Assessor need not have to verify list of cheques received with Collection Statement before sending the revenue collection to the bank. Revenue leakage caused by dishonored cheques and stamping fraud can also be prevented. • Agents o Wage and transportation cost for the law firms and agents are reduced and indirectly, the cost incurred by the customer is reduced too. o Administrative expenditure involving stamping and labor cost for dispatch are reduced which results in an overall reduction in cost of doing business. e) Economic Growth and Improvement of Skills and Expertise With the launch of STAMPS, it gave an economic and work opportunity to the vendors. Person who benefits from the job opportunity can increase their skills and expertise in information technology.
 8. What were the most successful outputs and why was the initiative effective?
Stamp Duty Division is one of the divisions under the Revenue Management Department in IRBM. Among its main function is to recommend proposals on the legislation pertaining to stamp duty to the Finance Ministry, overseeing the operation of Stamp Offices, providing technical advisory as well as training for staff stationed at Stamp Offices. The Information Technology Department is tasked with the responsibilities of designing and developing operation system as well as maintenance of server, system network hardware and software. To oversee the implementation and success of the project, IRBM formed a Project Steering Committee headed by the CEO of IRBM. The committee member consists of the Deputy CEO (Tax Operations), IRBM’s CIO, relevant heads of department and user leaders. The CEO of IRBM was the patron and the Deputy CEO in charge of Tax Operation was the advisor of the committee. The Director of Revenue Management Department was appointed as project Manager. The committee members were made up of Directors of Stamp Duty Division, Information Technology Department, and Administration Department. The main function of this committee was to act as driving force as well as to oversee the progress of the project from time to time. A working committee was also set up to monitor the actual running of the system, in which officers from Stamp Duty Divisions as well as Information Technology Department sits in the committee. The Stamp Duty Officers were responsible for the operational work with officers from Information Technology Department taking charged of the development and application of the system. This committee was set up to study the technical application system. Its main function was to coordinate and oversees project development as well as submitting proposal for any amendment to the project to the steering committee. The devolvement and planning system was used as mechanism to prepare Gantt chart as tool to oversee the progress of the project according to the plan. The user requirement specification was developed by the system development committee with the co-operation of the officers from branch Stamp Office in formulating the needs of the users and the specifications of the system. System development team was set up by the Information Technology Department of IRBM and the vendor to design and developed the system. The server and network team was set up to oversee the smooth running of the system line so that there would be in good condition with minimum disturbance.
 9. What were the main obstacles encountered and how were they overcome?
There were several obstacles encountered during the implementation of the initiative which consists of internal and external factors. The main obstacle is obtaining the budget to improve the existing system during the development stage. To develop the system, huge investment must be made on the infrastructure to accommodate the requirement of the users. This includes upgrading the existing computer system to increase the capacity of the server to cater for processing and storing data. The initiative that was being developed would require the attachments of documents to be uploaded into the system. With a higher server capacity, information can be generated and extracted easily at any time. The upgrading and replacement of hardware, networking, and software licenses is capital intensive and requires substantial financing. To overcome this issue and ensure the optimal capacity with minimal cost, the system was implemented in developed in modules and stages and part of the budget needed was acquired from some other allocation within IRBM’s own resources. The other obstacle to the success of implementation of STAMPS was initial resistance by IRBM’s personnel itself. Users are new to the new work processes and tend to make mistakes. User acceptance of using web base in certain application was low. This issue was addressed by strengthening the training strategy and setting up of coordinated help-desk. Road shows were also conducted by Stamp Offices at regional level. Briefing and training were also organised to educate the external user about e-stamping process through the system. Simultaneously user will be informed about the advantageous and benefit acquired by using the system. Feedback from user regarding their requirement will also be taken into account in any technical design improvement.

D. Impact and Sustainability

 10. What were the key benefits resulting from this initiative?
The effectiveness of STAMPS can be measured through the volume of assessment processed which increases by the year. • 2008 – 181,541 assessment with revenue collection of RM 614.37mil • 2009 – 792,214 assessment with revenue collection of RM 962.26mil • 2010 – 933,985 assessment with revenue collection of RM 2,303.39mil • 2011 – 1,391,224 assessment with revenue collection of RM 3,155.81mil • 2012 – 1,701,935 assessment with revenue collection of RM 3,753.83mil STAMPS have significantly contributed to the overall collection of stamp duty. Total collection for Stamp duty in 2010 is RM4.1 billion where 56% is contributed by STAMPS. The percentage of contribution has increased to 67% in 2011 and 2012. The KPI of STAMPS is also measured by the significant reduction in processing time. Traditionally, processing of applications, which requires valuation by VSPD, takes 30 to 45 days. It could at times extend to 90 days if it involved properties from outlying regions. In comparison, processing in STAMPS only takes from 1 to 15 days. On the other hand, cases that do not need valuation can be processed on the spot or maximum of processing time is only 5 days without having documents being physically transferred or moved from the agent’s office. STAMPS change the work procedures in stamp office and resulted in an increased in the confidence level of the public towards the efficiency of the system. This is evidenced by the increase in the number of transactions and the number of law firms using STAMPS for example there was only 792,214 transactions by 10,993 agents in 2009 as compared to 1,701,935 transactions by 20,871 agents in 2012. This shows a huge increase of 114% of transactions and 90% of agents using STAMPS. Another significant benefit of STAMPS is the accounting management of the system. It generates Bank-in-slip (BIS) for online daily account reconciliation. Revenue collection for each day is reconciled by STAMPS before the collection is sent to the bank. Internal users can generate the required statistics and reports at any time. Data from STAMPS will be sent periodically to Electronic Revenue Accounting System (eRas) for accounts management and to Data Warehouse Application for Enterprise Tax Payer Management System. STAMPS helps to curb and reduce fraudulent stamping involving adhesive and impressed stamp. The stamp certificate and receipt has high quality security features thus it is difficult to counterfeit. Enquiries regarding STAMPS can be made through email. This has proven to be successful with the increase of enquiries made through email to STAMPS Help Desk. This practice helps to save cost and time. STAMPS modernizes the stamping process of delivering data and document electronically. Notice of Assessment is computer-generated thus ensuring an accurate and correct assessment. The Notice is delivered electronically rather than by postal service and hand delivered. The collaboration with CIMB Berhad and Malaysian Electronic Clearing Corporation Sdn. Bhd. (MyClear) ensures the success of electronic stamp duty payment which completes the whole online stamping process. Problems that arise with manual payment such as risk of fraud and malpractice, robbery and cash lost in transit were reduced, if not eliminated by electronic stamp duty payment. The evolution of stamping by IRBM is in line with the government initiatives to promote online services for all government-related business. STAMPS has enhanced IRBM’s delivery services in stamping activities and reduce revenue leakage and fraud cases. STAMPS is relevant and significant to National Agenda because of its ability to improve the efficiency and effectiveness of public service as well as increasing the nation’s revenue. STAMPS has all it takes to be a model of government delivery system. STAMPS innovates the modernization of the whole system of stamping where online transactions are the way to go in the future as they help save time and cost and a hassle free service.
 11. Did the initiative improve integrity and/or accountability in public service? (If applicable)
The Stamp Act 1949 governs administration of stamp duty and like other legislature, it is subject to amendment according to government policies. STAMPS is a web-based application which was intentionally developed using the modular architecture. Such architecture would be able to support any amendment and could easily be enhanced. The robustness of STAMPS makes it sustainable. This is evidenced by the evolution of STAMPS from the day it was introduced until the last amendment in Budget 2013. As a system which can adapt to any change and new development, STAMPS is able to expand its functions to suit future needs. Among the enhancement being planned includes system integration with the Land Office in which STAMPS can integrate with the whole process of registration of titles of properties at the Land Office. In this way, registration of titles can be done faster and at the same time avoid fraud that would cost losses to the government and the public. Previously all documents to be stamped have to be sent to stamp office either physically or online to be assessed. To expedite the stamping process, STAMPS will be upgraded so that for certain types of instrument, the duty payer can make his own assessment and make payments accordingly. As a result of self-assessment, IRBM workforce can be redeployed to carry out enforcement activities which would increase the nation’s revenue. This system is expected to be implemented in 2015. To improve the service delivery, STAMPS will provide a facility for the agent and duty payers to check assessment status and verify the authencity of certificate through short message service (SMS)/mobile. Currently only agents with user ID can do the checking through the internet. By providing this facility, it is hoped that agents and lawyers appointed by the customer can be more responsible in giving services to the public since the public can receive information transparently from the government through IRBM. Currently, electronic payment through FPX is only available through a few commercial banks operating in Malaysia. Meanwhile payment through internet banking is only available through one bank. To ensure STAMPS sustainability, it is planned that electronic payment would be extended to all banks operating in Malaysia. This way, cheque forgery can be eradicated. Law firms and agents can minimize the cost on printing and also their delivery cost. Overall, administration cost for the government will be reduced. This facility is continuously being improved and it is expected that more banks will join the collaboration. STAMPS was developed specifically to suit the requirements of IRBM in managing its stamp duty collection systems and towards more efficient governance of tax revenue collections. Due to the nature of IRBM’s function, this initiative is unique to us and has not been replicated by any other public agencies or service. Internally, the system is being disseminated throughout IRBM’s branches nationwide. However, the basic principle of the system may be replicated by other organization that has similar functions and duties.
 12. Were special measures put in place to ensure that the initiative benefits women and girls and improves the situation of the poorest and most vulnerable? (If applicable)
Implementing a project with a significant impact on the effectiveness of the service delivery provided by a government agency requires an effective implementation plan. It also requires the agreement and support, a solid commitment and a common goal on the part of the key stakeholders, and all the parties concerned from the very start. The key stakeholders must be involved and hold regular steering committee meetings if an initiative is to stay on course and advance in a timely manner. Communication and understanding among the relevant parties plays an important role to ensure the smooth running of the project planning. As for STAMPS project, the commitment of the Steering Committee, Technical Committee and the Working Committee has given proper direction and steered the project towards the intended goal. The use of a clear and structured approach was the secret in avoiding any complications. With simple projects designed plan, and clear development goals that can be achieved at each stage, through constant project implementation evaluation, the project has been successfully implemented. One very significant factor that contributed to the success of STAMPS was the trust and close collaboration with related departments within IRBM, government agencies and private-sector. In any undertaking, flexibility, understanding of each other’s difficulties and needs, and positive approaches to the tasks at hand can help ensure mutually beneficial enterprises. The collaboration among all parties especially the vendors, the IRBM’s staff and the management has brought a big success to the project. Other important lessons learned from this project were: • The IRBM’s ICT officers and end users should have been given opportunity to be involved in the development of the project from the very beginning. Their involvement towards the end of the project did not help much in resolving some of the glitches arising at the commissioning stage. • The party responsible for budget allocation should monitor the project to ensure that the initiative is progressing smoothly and completed in time and payment made in a timely manner.

Contact Information

Institution Name:   Inland Revenue Board of Malaysia
Institution Type:   Government Agency  
Contact Person:   Puteh Aziah Mohd Yusoff
Title:   Director, Quality Management & Innovation Division  
Telephone/ Fax:   60383138843 / 60383137834
Institution's / Project's Website:  
E-mail:   puteh.aziah@hasil.gov.my  
Address:   HEADQUATERS INLAND REVENUE BOARD OF MALAYSIA
Postal Code:   63000
City:   Cyberjaya
State/Province:   Selangor
Country:  

          Go Back
Print friendly Page