Chong contradicts statement by DAP MPs on Income Tax Act amendment

KUCHING: Democratic Action Party ( DAP) Sarawak chairman Chong Chieng Jen denies that Pakatan Harapan – the opposition front – did not object to the amendment to paragraph 13 (1)(b) of Schedule 6 of the Income Tax Act 1967.

With the amendment, the income of religious institution or organisation will be subjected to tax.

Chong was commenting on the front page news on The Borneo Post dated Dec 17 entitled ‘ Bipartisan nod to amendment’ during a press conference at the DAP headquarters here yesterday.

The Borneo Post report was based on a press statement by DAP Lanang MP Alice Lau, who said there was no confusion and no rejection with regard to the interpretation of the amendment when it was read a second time in Parliament.

Lau said based on the understanding that religious institutions would still be tax- exempted unless they transformed into profit-making entities, she and other DAP MPs did not object the amendments.

In that same report, The Borneo Post also quoted DAP’s Beruas MP Ngeh Koo Ham that his understanding of the amendment was that incomes of religious bodies were channelled to support religious and charitable activities should not be taxed.

In explaining why there was no objection to the amendment, he said if the income were to be used to generate more incomes, then it should be taxed.

However, Chong argued that by objecting to Budget 2017, Pakatan Harapan had in effect objected to the whole of the Finance Act 2016 ( FA2016).

“For all intents and purposes, the FA2016 is an Act to implement the policies stated in Budget 2017. The FA2016 is a consequential act of Budget 2017 and is part and parcel of Budget 2017.

“The title of FA 2016 in full is ‘An Act to amend the Income Tax Act, the Petroleum ( Income Act) Act 1967, the Real Property Gains Tax Act 1976, the Labuan Business Activity Tax Act 1990 and the Goods and Services Tax Act 2014,” he pointed out.

Chong, who is Bandar Kuching MP and Kota Sentosa assemblyman, further said the FA2016 was to amend all the Acts stated therein to carry out the policies of Budget 2017.

He explained that every year after the passing of the Budget, a Finance Act would follow suit – citing the Finance Act 2015 as an example, which was tabled and passed the day after the passing of Budget 2015.

Chong further said the whole of Budget 2017 was put to vote in Parliament on Nov 22 at 11pm, with 73 opposition MPs opposing, 105 BN MPs supporting and one MP abstaining.

“Therefore, when the FA2016 was tabled on Nov 23, 2016 (the next day) to carry out and implement the policies of Budget 2017, there was no necessity to restate our position of objecting to it when we had the previous night objected to the whole of Budget 2017,” he argued.

Chong further disclosed that before Budget 2017 was put to vote on Nov 22, there were calls for vote on the allocation for each and every ministry but the opposition did not call for the counting of every vote “to record our objection to each and every ministry”.

“This is not taken to mean that we the opposition have agreed to the funding allocated to the respective ministries,” he explained.

Chong said Pakatan Harapan had objected ‘ in total’ Budget 2017, and that included FA2016.

Pending assemblywoman Violet Yong Wui Wui and Tanjung Batu assemblyman Chiew Chui Sing attended the press conference.

Chong’s claim of the opposition’s objection to the amendment Income Tax Act 1967 also contradicted the admission of another DAP lawmaker, Seputeh MP Teresa Kok, that she was not aware of the amendment passed by Parliament on Nov 23 and the Senate on Dec 15.

“We had long parliamentary sessions and nobody looked at the Income Tax Bill. Normally, Prime Minister ( Datuk Seri) Najib Tun Razak will announce it in his budget speech,” she was quoted as by the new portal FMT.

Kok added that the MPs could have been distracted by many Bills requiring their attention, especially PAS president Hadi Awang’s Private Member’s Bill in the last sitting.

“I urge the prime minister to clear the air about whether the interpretation of the amendment of the Income Tax Act is correct and to explain the rationale behind it.

“If our reading of the amendment is indeed correct, then the government should reverse it.”

Kok urged religious bodies to prepare for the implications of the amendment in their accounts. It will be unfair for the nonMuslim religious bodies as much of their income is derived from donations. They are not profitoriented bodies,” she added.