Perks for private institutions


PRIVATE higher education was among the sectors to receive a fair share of Budget 2006, with incentives for private education operators, academics and parents. 

Of the total RM5bil budget (development expenditure) allocation for education, RM1.4 bil (28%) went to higher education.  

Private college operators, who in the past have cried foul over the “meagre” incentives, welcomed the sizeable allocation this year. 

Dr Parmjit: 'This is the first time some realincentives have come through for the privatehigher education sector.'

“This is the first time some real incentives have come through for the private higher education sector.  

“We did not achieve everything we hoped for but we cannot expect things to change completely overnight. 

“We must thank the minister (Datuk Dr Shafie Mohd Salleh) for his support. He has also been very sympathetic to our needs,” says Malaysian Association of Private Colleges and Universities (Mapcu) deputy president Dr Parmjit Singh. 

The four-pronged strategy of the budget – to accelerate economic activities, provide a business-friendly environment, develop the country's human capital and enhance the quality of life of Malaysians – implicates higher education in several ways. 

Universities, colleges and vocational training institutes are the prime movers in producing a competitive and skilled workforce.  

Also, the development of the country's higher education sector – particularly private higher education – needs to be fast-tracked if Malaysia is to achieve its goal of becoming the regional education hub.  

As it is, neighbouring countries like Singapore and Thailand are close competitors, attracting foreign students from the region and beyond.  

To increasethe numberofscientists,privateinstitutionsofferingsciencecourses willbe given anInvestmentTaxAllowanceof 100% for10 years. -filepix

“The budget is supportive of private education institutions and has incentives to stimulate our growth,” says Mapcu secretary-general Dr Lee Fah Onn. 

Incentives for new courses 

One of the incentives for private higher education institutions (PHEIs) is the tax deduction on development and regulatory expenditure for institutions that offer new courses over three years.  

“This is a positive point because private institutions invest a lot when starting a new course. Also the incubation period before we see any returns is quite long. These deductions will be helpful,” says Dr Lee. 

“Before a private institution offers a new course, there are a lot of developmental and regulatory compliance costs that is incurred.  

“These include the cost of obtaining validation from a foreign partner university, costs of obtaining approval from LAN (National Accreditation Board) and the Higher Education Ministry and so on. 

“At present, these costs which are incurred before a course begins are not tax deductible. Now, under the budget, we are eligible for deductions. This is something we have pushed for a long time. It is a major boost for us as new courses are costly,” says Dr Parmjit. 

Dr Shafie: 'The budget for higher educationwas all encompassing'

The scope of courses that qualify for tax relief (for individual tax payers) will be broadened to include professional courses, like accountancy and law. This was included to encourage life-long learning, 

To increase the number of local scientists, PHEIs specialising in science courses will be given Investment Tax Allowance of 100% for 10 years. This is limited to specific courses in Biotechnology (Medical and Health Biotechnology, Plant Biotechnology, Food Biotechnology, Industrial and Environmental Biotechnology, Pharmaceutical Biotechnology, Bioinformatics Biotechnology); Medical and Health Sciences (in Gerontology, Clinical Research, Medical Biosciences, Biochemical Genetics, Environmental Health, Community Health, Molecular Biology, Immunology, Immunogenetics, Immunobiology); Material Sciences and Technology; and Food Science and Technology. 

These courses will be reviewed from time to time by the ministry. 

The Higher Education Ministry will also set up a unit to assist PHEIS in obtaining accreditation and overseas recognition.  

Dr Lee also urges the government to consider several other proposals to spur the growth of private higher education.  

“One area that was overlooked was staff development. To attract international students, we need high quality teaching staff. PHEIs have requested for incentives on staff development before but so far there has been nothing. I hope the government considers this,” he says.  

Something for everyone 

It was not just the industry that benefited from the budget. Prime Minister Datuk Seri Abdullah Ahmad Badawi announced automatic tax relief of up to RM4,000 for parents with children pursuing tertiary education. This applies also to those with children studying at recognised universities abroad.  

The tax relief for disabled children pursuing higher education was also increased from RM5,000 for each child to a total of RM9,000. 

Dr Shafie expressed gratitude for a budget that was all encompassing.  

“I am glad that the budget encourages more of our children to pursue tertiary education aslifelong learning has got a tax exemption of RM5,000.  

“There is aid for the disabled and increase in the number of students we are able to take into polytechnics under the double shift system,” he said. 

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