Sarawak tells why it wants its man at LHDN

Sarawak Tourism, Arts and Culture Minister Abdul Karim Rahman Hamzah today said that having a representative at the federal Inland Revenue Board (LHDN) would allow Sarawak to claim the return of its share of the tax revenue collected in the state. 

He said having a representative from the state on the LHDN board was needed to ensure the relevant allocation of funds, given Sarawak's vast size. 

"All these years, we have been doing a lot of collections here in Sarawak, just like in other parts of Malaysia. 

"Companies and individuals have been paying taxes, and these taxes all go to the finance ministry. So that is one of the reasons we would like to see some representation on the board," he told MalaysiaNow.

Earlier this week, Sarawak Premier Abang Johari Openg said he had submitted the name of a candidate to represent the state on the LHDN board of directors. 

Karim said while Putrajaya was obliged to provide special grants for Sarawak under Article 112D of the Federal Constitution, the state government wanted these grants to be specified through a formula based on the annual income revenue at the federal level instead of in a fixed amount. 

"The rightful place to know how much tax is collected in Sarawak is at LHDN, not the finance ministry," he added. 

"The figures from LHDN can be a guide for us in formulating how much we can demand in funds for Sarawak. The smaller the amount of revenue that the federal government gets, the less we ask for. The bigger the amount, the more we ask for. That's fair."

Adding that the finance ministry is in charge of formulating financial policies, Karim said Sarawak only needed information on how much tax is collected in the state. 

"This can be used to calculate how much should be returned to Sarawak for development, as prescribed under Article 112D of the constitution or under the annual federal budget," he said. 

"Who sits in the finance ministry is the prerogative of the federal government, not the state administration.

"We are demanding a seat at LHDN because that was agreed on by all parties when we agreed to form Malaysia, as one of the safeguards for the state." 

Law minister Wan Junaidi Tuanku Jaafar meanwhile said that allocations for the development funds were fundamental as they had been articulated in the Inter-Governmental Committee report, one of several important documents in the Malaysia Agreement 1963. 

"When the Cobbold Commission made its first report, it was submitted to the intergovernmental committee to provide more details on what was reported," the Santubong MP said. 

"The committee suggested that Sarawak and Sabah have a representative on the revenue board."

He added that the amendments of the four articles in the Federal Constitution relating to the rights of Sabah and Sarawak must be upheld by Putrajaya. 

"It is a constitutional obligation for the federal government to realise this matter," he said. 

"Whoever is appointed (to the board) by the Sarawak premier, the federal government must accept."