Page:Agreement concerning certain overseas officers serving in Sabah and Sarawak 7 May 1965.pdf/8

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3. The allowances and passages mentioned in clause 2 of this Agreement are as follows:

(a) an inducement allowance paid to a designated officer at such annual rate as may be specified from time to time by the Government of the United Kingdom after consultation with the Government of Malaysia;

(b) any education allowance to which a designated officer may be entitled at rates and under conditions specified from time to time by the Government of the United Kingdom after consultation with the Government of Malaysia;

(c) passages on such occasions as the Government of Malaysia may with the concurrence of the Government of the United Kingdom prescribe.

4. In the event of the Government of Malaysia on or after the appointed day paying a pension, gratuity or compensation to a person who was a designated officer for the purposes of the Overseas Service (Sarawak) Agreement, 1961, or the Overseas Service (North Borneo) Agreement, 1961, the Government of the United Kingdom will, in accordance with such procedure as may mutually be agreed between the said two Governments, reimburse the Government of Malaysia the following sums:

(a) that part of any gratuity paid by the Government of Malaysia to such a person which accrues to that person by virtue of the addition to his emoluments of the inducement allowance referred to in whichever of those Agreements apply inrelation to him;

(6) that part of any pension paid by the Government of Malaysia to any such person which accrues to such person by virtue of the addition to his pensionable emoluments of the inducement allowance referred to in paragraph (a) of this clause which shall bear the same proportion to the total pension payable to that person in respect of his service in Sarawak or Sabah, as the case may be, as the total amount of inducement allowance as aforesaid paid to him by the Government of Malaysia bears to the aggregate pensionable emoluments earned by him while in the public service of the Government of Sabah or Sarawak;

(c) one half of the aggregate amount paid by the Government of Malaysia as compensation to such a person.

5. The Government of the United Kingdom will take such steps as may be necessary to exempt the allowance referred to in paragraph (b) of clause 3 of this Agreement from the operation of any income tax law for the time being in force in the United Kingdom, and the Government of Malaysia will take such steps as may be necessary either to exempt the said allowance from the operation of any income tax law for the time being in force in Malaysia, or to ensure that the amount after the deduction of income tax received by a designated officer by way of the said allowance is equal to the allowance specified by the Government of the United Kingdom in pursuance of paragraph (b) of clause 3. No. 8058