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Charities Urged To Register With MoF So Covid-19 Donors Qualify For Tax Exemptions

Charities Urged To Register With MoF So Covid-19 Donors Qualify For Tax Exemptions

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Malaysian charities collecting donations to help the victims of Covid-19 are urged to register with the Ministry of Finance (MoF) so that their donors can receive tax exemptions.

Senior Minister (Defense) in the Prime Minister’s Department, Datuk Seri Ismail Sabri Yaakob advised charity organisations to do so after both the Inland Revenue Board (IRB) and the MoF said in March that tax deduction incentives will be given to those who donate towards the country’s fight against the pandemic.

On 24 March, Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said in a statement that his ministry welcomes the generosity of all Malaysians who would like to contribute and donate towards addressing the outbreak, whether as individuals or as a corporation.

Tengku Datuk Seri Zafrul Tengku Abdul Aziz released the statement following the Economic Action Council announcement. (Credit: Wikiwand)

He shared that government-linked companies (GLCs) had, at the time, donated a total of RM60 million in the form of medicine, medical equipment, and personal protective equipment (PPE) to the Ministry of Health (MoH).

According to him, the MoF has approved a tax deduction for contributions and donations in cash and in-kind by individuals and corporates to the Covid-19 Fund and the MoH.

The corporate sector is encouraged to emulate the generosity of GLCs in assisting national efforts to combat the Covid-19 outbreak.

Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz via The Edge Markets

Meanwhile, on 26 March, the IRB said that the tax incentives for donations of cash and items to the MoH’s Covid-19 Fund are provided under the Income Tax Act 1967.

On the other hand, for donations to the Covid-19 Fund under the National Disaster Management, Prime Minister’s Department and contributions to any other organisation, these are approved under subsection 44 (6) of the same act.

IRB offers tax incentives for both cash and item donations. (Credit: Malay Mail)

In order to receive these tax deductions, donors would need to obtain a receipt with an official stamp from the charity organisation according to the format issued by MoF. These apply for both cash donations as well as item, equipment, or services donation.

Taxpayers are advised to keep the transaction record as well as receipt or document so that it can be used as a reference when filing the Income Tax Return Form (BNCP) and for review by the IRB.

IRB via Malay Mail

For donations of equipment or items, documents required would include an official receipt or letter of acceptance from the recipient body; and letter of acknowledgement of service value or project cost value from the relevant government agencies.

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