The Sarawak government has given an assurance to look into a controversial amendment to the Income Tax Act 1967 passed by Parliament that may force religious organisations nationwide pay tax starting from the assessment year 2017.
State Deputy Chief Minister Datuk Amar Abang Johari Openg and Sarawak Second Finance Minister Datuk Seri Wong Soon Koh both claimed to be unaware of the details in the recent revision to Paragraph 13(1)(b) of Schedule 6 of the Income Tax Act 1967, but will study it, local daily The Borneo Post reported today.
“It seems to me that there is still much confusion over the interpretation of the amendment.
“My ministry will get in touch with the Finance Ministry to get the official interpretation of the amendments and its implications,” Wong was quoted saying.
He added that after that, he will raise the matter to the state Cabinet for discussion.
“Of course, one of the major topics would be whether the state could in anyway help the religious bodies and charitable organisations in Sarawak not to be affected by the amendment,” Wong was quoted saying further.
Abang Johari likewise was reported saying the state government will issue a statement after scrutiny.
The change to paragraph 13(1)(b) of Schedule 6 added on the requirement that the “contributions” received by non-profit religious organisations and religious institutions be meant solely for “charitable purposes” in order to qualify for tax exemption.
Finance Minister II Datuk Johari Abdul Ghani told the Malay Mail Online that the recent change to tax exemption laws on religious bodies is intended to safeguard public donations by plugging a legal loophole to ensure that public donations to religious bodies are not used for profit-generation.
However, both Muslim and non-Muslim religious groups are concerned that they will be taxed on their income, which they said is paltry and fluctuated annually.
They also stressed that the proceeds went into charity and service for social welfare works.
Source : @ The Malay Mail Online