No need for charity outfit to appeal if tax exemption not revoked, says Muhyiddin

Former prime minister Muhyiddin Yassin has claimed that Yayasan Albukhary would not have needed to file an appeal regarding its tax exemption status if it was not revoked by the Inland Revenue Board (LHDN), an agency under the finance ministry.

In his statement of defence in the defamation suit filed against him by former finance minister Lim Guan Eng, Muhyiddin said that he had seen a letter from the ministry to Syed Mokhtar Al-Bukhary some time in 2021.

The letter informed that the ministry had allowed the foundation's appeal against LHDN's decision not to recognise its tax exemption status as well as to impose a tax penalty, he said.

Muhyiddin also claimed to have seen the letter while being questioned by the Malaysian Anti-Corruption Commission.

"Therefore, I am allowed to make an inference and conclude that the tax exemption had indeed been cancelled, otherwise, an appeal would not need to be made nor any approval given by the finance ministry in 2021," he said.

The Perikatan Nasional chairman said the Albukhary Foundation had been granted tax exemption by the previous Barisan Nasional (BN)-led government, under Section 127(3A) of the Income Tax Act 1967.

"After the 14th general election, the plaintiff (Lim) was appointed as minister of finance from May 21, 2018, to Feb 24, 2020. As the finance minister, LHDN was under his (Lim's) jurisdiction and the tax exemption was not recognised by LHDN during the plaintiff's tenure in the position," he said.

Muhyiddin also claimed to have received a letter from Syed Mokhtar addressed to the Prime Minister's Office during his tenure as prime minister.

"The letter appealed against LHDN's decision not to recognise the tax exemption for Yayasan Albukhary given by the previous BN-led government as well as the decision to impose a penalty on the foundation.

"I, who was not the minister of finance nor the minister responsible for LHDN, referred the matter to the minister of finance at the time, namely Tengku Zafrul Abdul Aziz, for consideration, and he allowed the appeal," Muhyiddin said.

On March 27, Lim filed a lawsuit against Muhyiddin for allegedly issuing three defamatory statements on Facebook involving the latter over the tax exemption issue on March 9, 11 and 12.

Reports on the matter were then published by several newspapers and news portals.

The former Penang chief minister claimed that the statements also inferred that he had abused his position and power by authorising or ordering LHDN to impose taxes and penalties on the charitable foundation when it should not be taxed.