PARLIAMENT | Syed Saddiq Syed Abdul Rahman (Muda-Muar) has demanded transparency over the powers of the finance minister to grant tax exemption to individuals or companies.
In a question to Finance Minister II Amir Hamzah Azizan, the lawmaker inquired whether the government was prepared to disclose the names of those who received tax exemptions, the amount of tax revenue lost, and if it would ensure that this declaration is made annually as a move towards transparency.
He further inquired whether Putrajaya was prepared to ensure that there were no conflicts of interest in granting tax exemptions, citing research that had shown how individuals who received such privileges often went on to make political contributions.
"I don't want to blame only the government of the day - this tradition has been done by one government to the previous one. It has been done by many different prime ministers," Syed Saddiq (above) said in the Dewan Rakyat today.
He pointed out that such broad powers as allocated under Section 127(3)(a) of the Income Tax Act 1967 were unfair as they were applied in the cases of large companies, going on to claim that this caused losses of hundreds of millions of ringgit in tax revenue.
Conversely, he said, youth who lag on student loan payments and "makcik Kiah" (ordinary citizens) who miss out on a small tax payment could face being blacklisted.
Syed Saddiq then suggested that tax exemptions be brought to the relevant parliamentary select committee for discussions and refinements.
Pioneer status
In response, Amir said such exemptions were granted on the consideration of national benefits, such as the pioneer status incentive.
"To attract investment into our country, there is a period during which we allow tax exemptions. Sometimes we don't give them completely; we give them partially.
"But this is important because we compete with foreign countries to attract trade," he explained.
According to the Inland Revenue Board, the pioneer status is granted by the international trade and industry minister if the application by a company meets certain requirements.
A pioneer company is granted a five-year exemption from tax on its statutory income, starting from the production date specified in its pioneer certificate. It may apply for a further five-year extension, subject to meeting the relevant conditions. - Mkini
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