ACS secretary-general Ambrose Linang said the crux of the problem was the government not consulting religious bodies before proceeding with the amendment to the Income Tax Act 1967.

“What’s so difficult in engaging the religious bodies? I don’t understand what loophole in the Act the government was talking about,” he was quoted as saying by the Sarawak-based daily.

Kota Kinabalu Chinese Chamber of Commerce and Industry (KKCCCI) president Michael Lui pointed out the definition of “business” was very wide.

He thinks the government should encourage religious groups to carry out activities for them to be self-sufficient.

They were commenting on Finance Minister II Johari Abdul Ghani saying on Wednesday that the Income Tax Act 1967 had to be amended to plug a “loophole” used by religious bodies.

For example, he said religious bodies were paying huge allowances to committee members. He said religious bodies can write to the Inland Revenue Board (IRB) for clarifications on the amendments.

Malaysian Gurdwaras Council president Jagir Singh assured that gurdwaras do not pay allowances to their committees.

Jagir, who is also vice-president of the Malaysian Consultative Council of Buddhism, Christianity, Hinduism, Sikhism and Taoism (MCCBCHST), expressed regret that Putrajaya appears to be going after non-Muslim religious bodies.

“Most mosques and Muslim welfare bodies fall under state Islamic law,” he noted. “They will be tax exempt as government bodies or institutions.”

Linang urged the government to pursue the specific religious bodies, if any, that allegedly abused their tax exemption. The ACS had not heard of millions of funds being invested in properties.

In fact, he said, finance committees in churches and chapels were very strict with their financial management.

“All donations, including from the government, are used to maintain churches/chapels,” said Linang.

“They were also used for evangelisation, education, and on welfare work.”

The churches never use donations for other activities, he said.

Many churches lack funds to build new churches. That’s why construction of churches take years. We need to do it phase by phase.

“If churches have the money, they would use it to build churches and chapels, not invest in properties,” he said.

The amendment to the Income Tax Act 1967 was passed by the Senate on Dec 16 with no objections.

The amendment was earlier passed by the Dewan Rakyat on Nov 23 as part of the Supply Bill (Budget 2017), which the opposition had voted against.