Malaysia's BN backbencher club chairman says central bank, tax agency aware of RM2.6 billion donation

PETALING JAYA (THE STAR/ASIA NEWS NETWORK) - The deposit of RM2.6 billion (S$963 million) into Prime Minister Datuk Seri Najib Razak's personal account was known to both Bank Negara Malaysia (BNM) and the Inland Revenue Board (IRB), says Barisan Nasional Backbencher Club (BNBBC) chairman Tan Sri Shahrir Samad.

Shahrir said this in reply to a series of 15 questions asked by Akmal Saufi Mohamed Khaled, the son of Johor Menteri Besar Datuk Seri Khaled Nordin, on 1Malaysia Development Berhad (1MDB) and the RM2.6 billion donation.

He said that the country's central bank, BNM, and the IRB would have also been aware of the transfer as donations were not tax-exempt.

"Political donations are tax-exempt but the donors still need to pay tax. IRB will be aware (of the donation) as the donor is not exempt from being taxed even though the receiver is not taxed on the donation he receives," he said, adding that there was no need to inform the Finance Ministry of the donation as it was a political donation and not used for the Government.

Malaysia's anti-graft unit said earlier this week that the amount deposited into Najib's private bank accounts were donations from unnamed Middle Eastern sources and not from the debt-laden state fund 1MDB.

The controversy over the issue - first exposed in a Wall Street Journal (WSJ) report last month - has led to both Najib and the opposition challenging each other to reveal the sources of their political funding.

Shahrir said that at present, there was no regulation in the country that insisted on the declaration of political donations and political funds.

"Since when do political donations and political funds need to be revealed to all? This situation can be changed with (new) laws so that political funding can be transparent, but at this moment there are no such laws yet," he said, adding that he fully supported new laws and regulations put in to make political donations and funds more transparent.

He also said that the donation was not related to the 1MDB issue.

"An investigation has been launched. 1MDB has declared that none of its funds have been channelled into the accounts of the Prime Minister/Umno president/Barisan Nasional (BN) chairman," he said.

He added that the donation was meant to be used for political purposes, "for Umno and BN."

Akmal, who is also Malaysia's youth parliament's security, law and integrity committee chairman, first posted the questions on the blog Apanama.