GST: Government taxing charity?

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Photo courtesy of wargamarhaen.blogspot.com

Steven Sim expresses concern about the possibility of the impending Goods and Services Tax being imposed on charities.

GST will be implemented nationwide in less than a month.

Many have discussed this from various perspectives. I have highlighted the impact of GST on our society, notably on youth, women and working class families.

But there is one angle that many have missed till now; that is, the social impact of GST.

Basically, the government is treating all charities and non-profits like regular businesses and therefore they will be subjected to GST. This means, not only charity will be more expensive after 1 April, but instead of the government giving to charities, now the government will be taxing them; essentially, the government will be taking money from charities.

As it is, charities in Malaysia, unlike their counterparts in more developed countries, do not receive much government support. (The Singapore government, for example, provides matching grants to charities.) Hence, they are reliant on private and corporate donors.

With the new tax scheme, even tax-exempt charities will be taxed, reducing the real value of donations. After 1 April, whenever we donate, the charity does not get 100 per cent of our donation, but a portion will go to the government!

Imagine the impact of GST imposed during a major crisis such as the East Coast floods, where hundreds of millions of ringgit in cash and kind was donated to aid the victims. Technically, for every RM100m donated, RM6m would go to the government.

Please pressure the government to review its position on GST in general. Your support is crucial.

Steven Sim is the Member of Parliament for Bukit Mertajam.

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