State can stop the taxes
See appeals to Adenan to wield state’s legislative power to save religious, charitable bodies from new taxes
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.