KOTA KINABALU: The government should rescind its move to tax the fundraising activities of community organisations and associations, says Datuk Yong Teck Lee.
The Sabah Progressive Party (SAPP) president said the funds raised by organisations and associations and other voluntary bodies were badly needed for the associations' own activities and needs.
"The new tax rule is also causing confusion, distress and anxiety to society and community leaders," the former Sabah chief minister said in a statement Wednesday (Aug 6).
Yong was referring to Practice Note 1/2025, issued on March 24 by the Inland Revenue Board (LHDN), that extended the definition of taxable person as a "body of persons" that includes community associations.
Yong agreed with Federation of Sabah Chinese Associations representative Tan Sri TC Goh, who said that the new tax will create an unnecessary burden for thousands of NGOs nationwide as such funds raised were only used for activities such as community programmes and not for commercial purposes.
Yong feared that non-compliance could expose community leaders to criminal charges of tax evasion as many associations and NGOs could not afford professional services of accountants or auditors.
"Adding to the burden of yet another new tax is the scary hazard of having to comply with new tax regulations because any misstep, mistake or non-compliance, however unintended, could expose the association leaders to criminal charges of tax evasion," he said.
Yong said that it was a fact that most 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," he said.
"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 urged.
