KUALA LUMPUR (March 11): Lim Guan Eng has threatened to sue ex-prime minister Tan Sri Muhyiddin Yassin if he (Muhyiddin) does not retract his claim that Lim had cancelled Yayasan Albukhary's tax breaks during his tenure as finance minister and apologise by Wednesday (March 15).

In a statement on Saturday (March 11), Lim stressed that as finance minister, he had never given specific orders to terminate tax exemptions for the foundation that were approved by the Barisan Nasional government.

"It is easy to inflame the sentiments of the people, which undermines harmony and public peace, by accusing me of purposely cancelling the tax exemption given to an Islamic charitable organisation.

"I have challenged Muhyiddin to show the letter stating that I had issued orders as finance minister to terminate the tax exemption to Yayasan Albukhary.

"I am confident that Muhyiddin is not able to produce the letter because it does not exist and is merely an invention of his."

"Seeing that he is busy with the Malaysian Anti-Corruption Commission (MACC)'s charges against him, including another charge on Monday, I will give him until Wednesday to state the truth and clear my name.

"If he fails to apologise and retract his malicious slander towards me, I will instruct my lawyer to start defamation proceedings immediately," said the Bagan member of Parliament.

In a statement on Thursday (March 9), Muhyiddin said that the tax exemption was ended by Lim Guan Eng, who was finance minister during the Pakatan Harapan administration after the 14th general election in 2018.

Muhyiddin faces four counts of abuse of power for using his position as prime minister when his party, Pari Pribumi Bersatu Malaysia, allegedly received RM232.5 million in bribes from corporate entities, and two charges of money laundering wherein Bersatu received RM195 million out of the total sum of illegal activites.

He claimed that the seven charges originated from allegations that he had abused his power as PM to appoint Bumiputera contractors for the Jana Wibawa programme, as well as that he had approved a tax exemption for Yayasan Albukhary, which he denied.

In a statement on Saturday, Muhyiddin replied that Lim had not addressed the "essence" of what he had been saying.

"I received a letter of appeal from Yayasan Albukhary when I was the prime minister. I was informed that the foundation had accepted a tax exemption for Islamic charity work. The exemption was given under section 127(3A) of the Income Tax Act 1967.

"After Pakatan Harapan took power in May 2018, the Inland Revenue Board refused to implement the tax exemption granted earlier, by reimposing the tax along with a 45% tax penalty on the foundation.

"Lim was the finance minister in charge of the IRB (Inland Revenue Board) at the time. Therefore, he is responsible for the decision to reimpose taxes and penalties of 45% on Yayasan Albukhary, which is an organisation doing Islamic charity work," he said.