Tuesday, March 20, 2012
KUALA LUMPUR: Taxpayers who wish to get tax deductions for their contributions to non-profit organisations, including schools and places of worship, can now apply to the Finance Ministry.
Deputy Finance Minister Datuk Donald Lim said they could apply directly to the ministry while the Income Tax Act 1967 was being amended to implement the move.
“The maximum deduction is 7% of an individual’s (annual) salary. This means that if a taxpayer donates 10% of his or her salary to such organisations, that person can only claim up to 7%,” he said at the Parliament lobby here yesterday.
Companies which made such donations could apply for a maximum deduction of 10%, he added.
“Those who donated to non-profit institutions this year prior to my announcement may apply for tax deductions as well. Applicants just need to have their donations certified by the organisations or religious bodies receiving the contributions,” he said.
However, Lim said for donations to places of worships, these could only qualify for tax deductions if these places were registered with the Home Ministry.
Churches or temples operating out of shoplots or registered as non-governmental organisations would not qualify, he added.
The deduction was applicable for next year’s tax filing, said Lim.
He added that the ministry would do its best to approve the applications soon.
Under Budget 2012, the Government had announced that it would expedite tax exemption approvals for all places of worship as well as educational institutions, including registered national, national-type, mission and government-assisted religious schools.
Lim said there had been many enquiries from the public on ways to apply for the deductions since the Budget announcement.
For more information, the public can contact the Treasury at 03-8882 3330 or e-mail Tax Analysis Division undersecretary Datuk Siti Halimah Ismail at firstname.lastname@example.org.
Previously, the tax exemption did not cover schools and places of worship but only zakat payments and donations to non-governmental organisations.