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KUALA LUMPUR (July 17): There were no documents to show that former finance minister Lim Guan Eng had revoked tax exemptions for businessman Tan Sri Syed Mokhtar AlBukhary's Yayasan Albukhary, the court heard on Wednesday.
Ministry of Finance (MOF)'s head of Tax Division Section (Service II) Hazlan Abdul Aziz said there were no such documents indicating that Lim, through MOF, said that they would not validate tax breaks given to the Islamic charitable organisation during his tenure in office.
Lim's lawyer Guok Ngek Seong asked, "Did you find any letter issued by Lim saying that [MOF] does not recognise the tax exemption to the charity foundation?"
"None," Hazlan replied.
Hazlan was testifying as a subpoenaed witness for the defence.
The alleged tax cancellation to the foundation during Lim's tenure as finance minister is the subject of his ongoing defamation lawsuit against former prime minister Tan Sri Muhyiddin Yassin.
Lim is suing the Bersatu chief for comments uttered last year where Muhyiddin claimed that the DAP chief had allegedly cancelled the tax breaks to the foundation.
Lim claims that the defamatory statements implied that he had abused his position and power as the then finance minister by authorising the Inland Revenue Board (IRB) to impose tax and penalties on a charitable organisation when it should not be taxed.
He also claims that the statements implied that he was racist and was intentionally targeting the Islamic charitable organisation
During the trial on Monday (July 15), Lim testified that based on the foundation's letter to Muhyiddin in February 2021, the foundation was given tax breaks amounting to RM2.65 billion from 2016 till 2018 through MOF that were not recognised "recently".
Lim also said that any such "revocation" never came to his attention while he helmed MOF. Therefore, Lim claims that any such "revocation" must have happened during Muhyiddin's time in office.
Lim had left office in February 2020, following the fall of the Pakatan Harapan government. Muhyiddin became prime minister in March 2020 under the Perikatan Nasional coalition.
On Tuesday, the Bersatu chief took the stand and noted that the tax breaks in contention were given during Barisan Nasional's time when former prime minister Datuk Seri Najib Razak headed MOF.
Muhyiddin asked why the foundation had approached him in 2021 over tax breaks from years ago. Therefore, he claimed that the "revocation" must have happened during Lim's time in office.
RM426.39 million additional tax cancelled following appeal
In the February 2021 letter to Muhyiddin, the foundation also stated that the tax breaks were granted to companies under the Yayasan Albukhary umbrella for their corporate social responsibility (CSR) programmes.
The CSR programmes, among others, comprise the construction of Islamic Art Museum, National Mosque renovation works, Albukhary Dialysis Center and Albukhary International University.
The foundation said that the monies which were part of the tax breaks were already utilised for the said projects. It added that it had to take on an additional tax of RM426.39 million, as the tax breaks were not recognised.
On Wednesday, Hazlan also testified that following the appeal to Muhyiddin, MOF cancelled the additional tax which was imposed on 27 companies under the foundation.
Following Hazlan's testimony, the defence closed its case. The brief trial began on Monday.
Judicial Commissioner Roz Mawar Rozain then set Sept 12 for submissions.