(Malay Mail Online) – KUALA LUMPUR, Dec 29 — A Sabah federal lawmaker has urged Putrajaya to impose tax on shipping firms which he said are turning in huge profits annually, instead of going after religious bodies.
Sabah DAP advisor Jimmy Wong pointed out that shipping companies have been exempted from income tax under the Cabotage Policy.
Tax shipping firms, not religious bodies – MP https://t.co/CkRNrBslLF
— Sabah Information (@SabahInfo) December 28, 2016
“Shipping companies operating within Malaysia are generating more than RM1.2 billion turnover a year and are exempted from profit taxation for more than 30 years until now.
“So why does the government go after the religious bodies but not the big corporations operating big businesses which generate huge profits and are paying huge bonuses and salaries?” the Kota Kinabalu MP was quoted saying by local daily The Borneo Post.
themmailonline: Sabah MP: Putrajaya should tax profitable shipping firms, not religious bodies https://t.co/lDMtooOSgC
— Malaysia News (@Malaysia_Latest) December 29, 2016
Wong was weighing in on the recent amendment to the Income Tax Act, which tax experts have said effectively means religious bodies have to start paying taxes on their income if it did not arise from contributions for charitable purposes.
Wong said that all income received by religious bodies — regardless whether it came from donation or businesses — should be granted exemption from tax, as religious bodies have to seek their own funding and cannot just rely on government allocations.
“Funding from the government is minimal, that is why religious bodies have to depend on themselves. Some invest in property and are self-financing through prudent investment. They are not abusing the law but when you tax them, you are taking away their income,” he said.
— FAM News (@freeasiamedia) December 29, 2016
FAM News on Twitter.
Commenting on the federal government’s justification that the amendment was meant to address cases where religious bodies allegedly paid huge allowances to their committees from profits generated from investments and property transactions, Wong said the government should furnish evidence to back the claim.
“If this is true, then the government should do something to stop that, not tax the religious bodies. This is victimising them,” he said, urging Putrajaya to reinstate the Income Tax Act to its status quo.
Sabah MP: Putrajaya should tax profitable shipping firms, not religious bodies https://t.co/XPSAecmjRt
— Shipping & Logistics (@EINShippingNews) December 29, 2016
The Income Tax Act’s Schedule 6, which lists down income which is exempt from tax, includes under item 13(1)(b) “a religious institution or organisation which is not operated or conducted primarily for profit and which is established in Malaysia exclusively for the purposes of religious worship or the advancement of religion”.
However, in the Finance Bill 2016 that was passed in the Dewan Rakyat on November 23 and by the Dewan Negara on December 15, an additional requirement that the income be meant for “charitable purposes” was introduced, starting year of assessment 2017 and onwards.
Read Original Article Here