Group relief shall not apply to a surrendering company which has been allowed a deduction in respect of qualifying farm expenditure on approved agricultural projects (Schedule 4A of the Act) or reinvestment allowance or granted any incentive under the Promotion of Investments Act, 1986 in respect of the same activity.

A company which has commenced an AFPP is required to maintain a separate account in respect of income derived from that project. Where expenses are incurred which are not directly attributable to that project, the Director General is empowered to allocate as expenses such amount as might reasonably and properly have been incurred in the normal course of business in respect of such project.

Any claim for a deduction by way of group relief shall be made in a written statement and shall be accompanied by a notice of consent from the surrendering company showing the amount of loss being surrendered.

The Director General is authorised to raise assessments or additional assessments on a claimant company to make good any loss of tax where it appears to him that a deduction should not have been granted to that company.

A note in the appendices to the text of the 1999 Budget Speech indicates that in relation to expansion and diversification projects, reinvestment allowance is claimable (by a surrendering company) if group relief is forgone.

The above provision introduces to Malaysia a new form of loss relief, group relief, which is one of the forms of loss relief permitted in some countries, e.g. the United Kingdom. Currently limited to AFPP, there are some benefits if group relief is made more widely available in future.

It is good to note that the Government is promoting the cultivation of maize which is a major cost item in poultry farming. Coupled with the efforts of Malaysian Agricultural Research & Development Institute (MARDI) to produce a suitable strain of maize for Malaysia, it is hoped that the cost of chicken to the consumer will be significantly reduced in the future.
Currently, expenditure incurred on the provision of services, public amenities and contributions to a charity or community project pertaining to education, health, housing as well as infrastructure approved by the relevant authority is admissible for income tax purposes.


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