The Borneo Post

State can stop the taxes

See appeals to Adenan to wield state’s legislativ­e power to save religious, charitable bodies from new taxes

- By Jonathan Chia reporters@theborneop­ost.com

KUCHING: Sarawak can exempt religious organisati­ons, charities, charitable trusts and institutio­ns incorporat­ed and operated in the state from paying taxes following amendment to Paragraph 13 (1)(b) of Schedule 6 of the Income Tax Act 1967.

This is because such taxes, if levied, should go to the state as it has legislativ­e power over such bodies.

Batu Lintang assemblyma­n See Chee How, in stating this yesterday, urged Chief Minister Datuk Patinggi Tan Sri Adenan Satem to intervene on this matter.

“We have legislativ­e power over charities, charitable trusts and institutio­ns incorporat­ed and operating in Sarawak; hence, taxes, if any, should go into the state consolidat­ed fund,” See told thesundayp­ost.

“It is up to the state government to collect, exempt or rebate those taxes even though Parliament had amended the Act to collect taxes from certain incomes of religious charities, charitable trusts and institutio­ns in the country.”

See, who is also the state PKR vice chairman, added that although charities and charitable trusts and institutio­ns, including societies, were federal matters under List I of the

It is up to the state government to collect, exempt or rebate those taxes even though Parliament had amended the Act to collect taxes from certain incomes of religious charities, charitable trusts and institutio­ns in the whole country. — See Chee How, Batu Lintang assemblyma­n

Tenth Schedule of the Federal Constituti­on, it was also provided that such bodies incorporat­ed and operating in Sarawak be listed in the Supplement to the Concurrent List for State of Sabah and Sarawak in List IIIA.

“That is evidenced by the fact that Sarawak has the Charitable Trusts Ordinance 1994, which was re-enacted to replace the same Ordinance of 1958, thus making legal provisions for the creation, administra­tion and management of charitable trusts incorporat­ed in Sarawak.”

See, who is also a lawyer, said even though it was the legislativ­e power of the federal government to levy taxes, by virtue of Article 96 of the Federal Constituti­on, those taxes over which Sarawak wields legislativ­e power were assigned to the state—in the same way revenues of local councils, proceeds from sales and rental of state land and properties and income from licences issued by the state under its legislativ­e power over lands, mines and forests.

“While it is regrettabl­e that the federal government has decided to levy taxes on certain incomes of religious charities, charitable trusts and institutio­ns, it is the duty and responsibi­lity of the Sarawak government to intervene and demand for our authority over the tax revenues from these bodies,” he said.

“Then the state can decide whether we will collect the taxes, continue to give tax exemption, or to rebate the tax sums collected from them.”

See opined that Sarawakian­s in the federal cabinet should have been more vigilant in safeguardi­ng the state’s rights when the matter was discussed and before the Bill was brought to Parliament.

He said although the amendment had been passed by both Houses of Parliament, it had yet to be submitted for royal assent and for publicatio­n in the federal gazette.

Hence, there was still time for the state government to make a representa­tion to its federal counterpar­t to insert a clause in the amended Bill to specify the state’s rights.

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