KUCHING: Taxes are only imposed on individuals using religion to benefit themselves, and not for religious purposes, clarified Natural Resources and Environment Minister Dato Sri Wan Junaidi Tuanku Jaafar.
Junaidi said all religious institutions or organisations should not fear being taxed as they qualify for tax exemptions as long as their income is for religious activities,
He said the amendment explicitly stated that religious institutions and organisations qualify for tax exemption.
“If their income from donations contributed by followers or from rental of the properties are solely for the purpose of religious worship activities or the advancement of religion, then they automatically qualify for the tax exemption.
“The amendment is, in fact, targeting individuals using religion for personal gains,” he said at an earth breaking ceremony of the Batang Kayan waterfront project in Lundu yesterday.
He claimed that he was clarifying the issue which had been misunderstood by many people and manipulated by the opposition.
The public had reportedly questioned the passing of the amendment that would cause non-Muslim religious institutions and charitable bodies to pay tax on income derived from some types of donations.
Many had urged the prime minister to confirm whether the interpretation of the amendment to the Income Tax Act was correct and, if it was, explain the rationale behind it.
The amendment to paragraph 13(1)(b) Schedule 6 Income Tax Act 1967 (Act 53) in Budget 2017 seeks to provide clarity of law on the application of exemption to religious institutions or organisations.
Prior to this amendment, there had been some confusion among taxpayers as to whether or not religious institutions or organisations automatically qualify for the exemption under the Act, or if they were required to obtain approval from the IRB director-general under Section 44(6) Act 53.
Among those present at the ceremony was Assistant Minister for Public Health Datuk Dr Jerip Susil and Opar assemblyman Ranum Mina.