‘Catch 22’ over foundation’s tax exemption status

KUALA LUMPUR: Former prime minister Tan Sri Muhyiddin Yassin (pic) has claimed that Yayasan Albukhary would not have needed to file an appeal regarding its tax exemption status if it was not revoked by the Inland Revenue Board (LHDN), which is an agency under the Finance Ministry.

In his statement of defence in the defamation suit filed against him by former finance minister Lim Guan Eng, Muhyiddin said he had seen a letter from the Finance Ministry to Tan Sri Syed Mokhtar Al-Bukhary sometime in 2021.

He said the letter notified him that the ministry had allowed the foundation’s appeal against LHDN’s decision not to recognise its tax exemption status and to impose a tax penalty.

According to Bernama, Muhyiddin also claimed to have seen the letter while being questioned by the Malaysian Anti-Corruption Commission (MACC).

“I am allowed to make an inference and conclude that the tax exemption had indeed been cancelled; otherwise, an appeal would not need to be made nor any approval given by the Finance Ministry in 2021,” he claimed.

The Perikatan Nasional chairman said the Albukhary Foundation had been granted tax exemption by the previous Barisan Nasional-led government.

“After the 14th General Election, the plaintiff (Lim) was appointed as finance minister from May 21, 2018, to Feb 24, 2020.

“As finance minister, LHDN was under his (Lim’s) jurisdiction, and the tax exemption was not recognised by LHDN during the plaintiff’s tenure in the position,” he claimed.

According to Muhyiddin, during his tenure as prime minister, he received a letter from Syed Mokhtar addressed to the Prime Minister’s Office.

“The letter appealed against LHDN’s decision not to recognise the tax exemption for Yayasan Albukhary given by the previous Barisan-led government as well as the decision to impose a penalty on the foundation.

“I referred the matter to the finance minister at the time, namely Tengku Datuk Seri Zafrul Abdul Aziz, for consideration, and he allowed the appeal,” claimed Muhyiddin.

On March 27, Lim filed a lawsuit against Muhyiddin for allegedly issuing three defamatory statements on Facebook involving the latter over the tax exemption issue on March 9, 11 and 12.

Reports on the matter were then published.

The former Penang chief minister also claimed that the slanderous statements also inferred that he had abused his position and power by authorising or ordering LHDN to impose taxes and penalties on the charitable foundation when it should not be taxed.