Yong: New tax rule on associations should be rescinded
KOTA KINABALU (Aug 6): The government is strongly urged to rescind its move to tax the fundraising activities of community organisations and associations because the funds raised by the organisations and associations and other voluntary bodies are badly needed for their own needs.
Former chief minister Datuk Yong Teck Lee said the new tax rule is also causing confusion, distress and anxiety to society and community leaders.
He said the Practice Note 1/2025, issued on March 24 by the Inland Revenue Department, extended the definition of taxable person as a 'body of persons' that includes community associations.
'I echo the views of Tan Sri T.C. Goh, president of the Gabungan Persatuan Cina Sabah (HuaZhong), that this new tax will create unnecessary burden for ten of thousands of active NGOs nationwide, where any excess from fundraising activities is not for commercial purposes but for long-term community programmes,' he said in a statement on Wednesday.
Adding to the burden of yet another new tax is the scary hazard of having to comply with new tax regulations because any misstep or mistake or non-compliance, however unintended, could expose the association leaders to criminal charges of tax evasion, he pointed out.
'It is a fact that most, if not all, associations cannot afford the professional services of accountants and auditors and tax planners.
'Association leaders consist mainly of selfless people who spend their own time and money on social and community service.
'Community fundraising itself is already a very arduous task, with community leaders literally having to beg sponsors. The community leaders and sponsors are the same ordinary business people who have recently been hit by SST (Sales and Services Tax), e-invoicing on all transactions and stamp duties on employment contracts. In spite of optimistic statements coming from ministers, the reality is that the business environment is subdued,' he added.
Yong, who is the president of Sabah Progressive Party (SAPP), called on elected representatives and ministers who have been accorded VIP treatment at association functions to speak up and do something before even more damage is inflicted on community organisations and the welfare of society.
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