I received a viral email about the donkeyland’s tax deduction issue for donation given to religious institutions for bumi and non-bumi tax payers.
Muslims pay zakat which is used entirely for Muslim community while taxes from non-bumi are mainly used for NEP-related projects like building MARA Universities, JPA scholarships, etc for bumi.
Donation to temple or church and Zakat Calculated Differently for tax purposes
When non-Malays do their religious obligations, it is NOT tax deductable unless the Church or temple has applied and obtained the approval for tax exemption, which is normally very stringent and seldom approved..
Even if approved the donation is restriced to 7% of your aggregate income.
(This has been revised to 10% from YA 2009 for company.)
Whereas zakat qualifies for 100% and is deducted from the tax liability.
An Example:
Ah Chong donates to temple or Church: RM10,000.
His Annual income: RM100,000.
Tax Relief: RM23,000 (For Individual) + RM 7,000 (For Donation)
Chargeable income: RM70,000
Tax payable: RM7,125
Ahmad – same income and relief
Chargeable income : (RM100,000 – RM23,000) = RM77,000
Tax payable: (RM7125 + 1680) = RM8,805
Less zakat: RM 10,000
Tax refundable: RM (1,195)
Ah Chong has the same annual income & donated the same amount, but he still needs to pay tax of RM7,125
Yet, Ahmad is entitled to a tax refund of RM1,195. He is also deemed a dutiful tax payer and honors his religious obligations.
How do you like that?
THIS IS CRUDE BUT STRAIGHT TO THE POINT !
Malays who are taxable usually prefer to contribute to Zakat (tax deductible from NETT tax) and give to State Religious bodies (not Govt or Income Tax Dept)
PAY YOUR TAXES DUDE, SO THAT UMNO PEOPLE CAN ENJOY THEIR LIVES AND
CALL YOU “PENDATANGS”
