MPs urge GST exclude charities, NGOs
KUALA LUMPUR: The GST, according to two MPs, has a
potentially negative impact on charities and non-profit
organisations.
The government, they said, should
immediately consider deferring the implementation of the
GST until “we become a mature, high-income economy with
proper government funding structures for NGOs and
charities”.
“However, if the GST is going to be
implemented anyway, organisations currently enjoying
tax-exempt status should, as a matter of principle, also
be exempted from GST treatment,” said Steven Sim Chee
Keong and Zairil Khir Johari, the MPs for Bukit Mertajam
and Bukit Bendera respectively in a joint statement.
Again, if the government is unable to exempt charities
from GST for whatever reasons, they pleaded, then it
should increase the taxable turnover threshold for
GST-exempted charities and non-profits to at least RM2
million from the current RM500,000. “This will help to
relieve smaller charities from some of the negative
consequences.” |
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The MPs cited from the Royal Malaysian Customs’ Goods
and Services Tax: Guide on Societies and Similar
Organizations booklet, which states that almost all
activities carried out by charities, non-profit
organisations and NGOs – including those currently
enjoying tax-exempt status – will be subject to GST.
As government support is often lacking, added the duo,
most charities cannot afford to wait passively for
donations. “Instead, active fundraising is required,
sometimes via ‘business-like’ activities, such as
selling merchandise and providing services such as the
rental of halls.”
Some non-profits actually
sustain themselves through a cross-subsidy model where
profits earned from business activities are used to
cross-subsidize the disadvantaged, continued the
statement. “For example, a dialysis centre may charge
commercial rates to patients who can afford it in order
to cross-subsidize those who cannot.”
While it is important that the government ensures no
profiteering occurs behind the facade of charity, the
statement conceded, “genuine charities must be assisted
and should not be burdened unnecessarily”.
In this respect, the government should consider creating
certain categories of non-profit organizations or
charities that are exempted from GST altogether, the duo
stressed.
Source:
Free Malaysia Today
, dated
27/01/2015 |
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