Yong: Scrap tax rule on NGOs
Published on: Thu, Aug 07, 2025 Text Size: Yong pointing at the Practice Note 1/2025 at the LHDN website. Kota Kinabalu: The Government is strongly urged to rescind its move to tax the fundraising activities of community organisations and associations because the funds raised by them and other voluntary bodies are badly needed for the associations' own needs. The new tax rule is also causing confusion, distress and anxiety to society and community leaders, said former Chief Minister Datuk Seri Yong Teck Lee.
Advertisement 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 10 of thousands of active NGOS nationwide. 'Any excess from fundraising activities is not for commercial purposes but for long-term community programmes.' Non-compliance could expose community leaders to criminal charges, Yong said.
Advertisement He said 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. 'It is a fact that most, if not all, associations cannot afford the professional services of accountants and auditors and tax planners. 'Associations leaders consist mainly of selfless people who spend their own time and money on social and community service,' said Yong who is Sabah Progressive Party (SAPP) President. He said 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. 'Ministers, please do something. Our elected representatives and Ministers who have been accorded VIP treatment at association functions should speak up and do something before even more damage is inflicted on community organisations and the welfare of society,' Yong said. * Follow us on our official WhatsApp channel and Telegram for breaking news alerts and key updates! * Do you have access to the Daily Express e-paper and online exclusive news? Check out subscription plans available.
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