LHDN demands varsity start paying up despite cancelled RM83mil tax bill
PETALING JAYA: Despite having its RM83mil tax bill cancelled, the controversy surrounding Universiti Tunku Abdul Rahman (UTAR) continues after a letter from the Treasury made clear that the not-for-profit university is to start paying taxes beginning Year of Assessment 2024.
UTAR came under the spotlight following recent reports that the Inland Revenue Board (LHDN) slapped the university with RM83mil in outstanding taxes and penalties.
In the latest letter sent to UTAR on Oct 8, it was stated that the RM83mil arrears owed to LHDN for outstanding taxes and penalties had been cancelled.
The cancellation of the RM83mil was for tax from 2017 to 2023.
Deputy Finance Minister Lim Hui Ying previously said LHDN stated that UTAR has never been granted any tax-exempt status, unlike the UTAR Education Foundation, which was granted such an exemption under Section 44(6) of the Income Tax 1967, on July 1, 2003.
“LHDN maintains that UTAR Education Foundation and UTAR are treated as two different entities for tax purposes.
“Accordingly, LHDN contends that income generated by UTAR Education Foundation continues to enjoy tax-exempt status, whereas income generated by UTAR does not,” she said in a statement.
MCA president and UTAR university council member Datuk Seri Dr Wee Ka Siong had met Prime Minister Datuk Seri Anwar Ibrahim twice to resolve the matter, with Anwar giving Dr Wee the undertaking that he would help.
Anwar is also the Finance Minister.
Sources said the letter from the Treasury was sent to UTAR Education Foundation Board of Trustees chairman Tan Sri Dr Sak Cheng Lum.
The same letter, however, also stated that the university will be subjected to taxation from Year of Assessment 2024 onwards.
The letter also stipulated that from January 2025, UTAR and UTAR Education Foundation must operate as two different entities, each with its respective audited accounts.
UTAR, which was set up in 2002, had never needed to pay tax as the university is owned by the UTAR Education Foundation, and established as a company limited by guarantee.
The permit to set up the university was given to the foundation.
UTAR was officially launched on Aug 13, 2002 as a not-for-profit private university aimed at providing affordable and quality education.
With campuses located in Kampar, Perak, and Sungai Long, Selangor, UTAR’s enrolment has since reached about 20,000 students
Since its inaugural convocation in 2005, over 86,900 students have graduated from the university.
