Political parties should be allowed to form business entities to fund themselves, said Parti Ikatan Bangsa Malaysia (Ikatan) Abdul Kadir Sheikh Fadzir.

Kadir said this would discourage parties from having to rely on political donations.

"So if a company is registered under a party to fund their expenses, they have a right to get tax exemption.

"For example zero tax, or a nominal tax of 10 percent," he added.

This was one of the proposals he raised during a joint meeting with PAS and the National Consultative Committee on Political Financing (JKNMPP) at the Malaysian Integrity Institute in Kuala Lumpur today.

Enforce spending cap

Speaking at a press conference after the meeting, Kadir said while parties are allowed to form companies at present, there should be laws regulating this.

For example he said, there should be a level playing field and the companies owned by parties should not be given special privileges.

"It should be transparent, meaning open tenders and things like that," the former cabinet minister said.

He said the companies should also be registered with the Malaysian Anti-Corruption Commission, Inland Revenue Board, and the Registrar of Societies.

Another proposal he and PAS deputy president Tuan Ibrahim Tuan Man presented to the committee was strict regulation of the election spending cap as the current system benefits richer parties.

He added that political funding laws must also criminalise the abuse of government agencies during the election. He added that political expenditure prior to elections must also be regulated.

Curb money politics

Another proposal from PAS and Ikatan was for the JKNMPP to help end a culture of money politics.

Kadir said many leaders are blackmailed into using money to win internal elections, which may go up to the millions.

"Not just Umno, but MCA, MIC, PKR and DAP... they all face this problem," he said.

JKNMPP was formed in August last year, following the uproar over the alleged RM2.6 billion donation Prime Minister Najib Abdul Razak received from the Saudi Royal family during the lead up to the last general election.

The committee was tasked with drafting a proposal that would act as a guideline for the new law which is expected to be named as the Political Donation and Expenditure Act (PDEA).

This proposal was published in September, calling for among others, a ban on foreign donation and compulsory reporting of every donation made to a political party or candidate.