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Selangor Plans New Tax System

The Pakatan Rakyat (PR) Selangor state government is planning to introduce a new tax system which will allow it to have control over taxes.

Mentri Besar Tan Sri Abdul Khalid Ibrahim wants to implement a zakat system that is currently practiced by Muslims to the non-Muslims in the state.

“The state and federal government have agreed that the zakat payment can be considered as income tax payment so when they pay RM2,000 to the fund, then they can deduct the same amount from their income tax and the zakat will stay in the state,” he said.

Zakat is a religious tax for charity which is obligatory for Muslims.

Khalid is considering a system where income tax would be deducted straight from the salary and channelled into a trustee fund or a Baitulmal which will be solely used for state development.

He said that those who contribute to the fund will be exempted from paying income tax to the federal government. Khalid also plans to also introduce this scheme to non-Muslims.

“During the glorious age of Islam, non-Muslims during that period could also pay zakat to the baitulmal. The zakat will be collected into one fund and the fund will be used for development,” he added.

Khalid explained that the new system was necessary because the federal government was currently withholding funds from the PR state government.

“This might jeopardize the relationship between the state and federal governments but I would like allocations to be given to the people of Selangor and managed by the state government. The fund however can be audited by the federal government,” he said.

Khalid stressed that the Baitulmal project is still in the discussion stage and he would consult with religious scholars before considering any further action.

Source : The Malaysian Insider

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