YONG PENG: A promised 10-year income tax exemption for Tunku Abdul Rahman University of Management and Technology (TAR UMT) has instead been approved for only three years, says Datuk Seri Dr Wee Ka Siong.
The MCA president, who is also chairman of the TAR UMT Board of Trustees, said the university had recently received the official approval letter, which granted only a three-year exemption despite Prime Minister Datuk Seri Anwar Ibrahim announcing a 10-year tax exemption for education-based foundations in February.
"I can confirm today that the 10-year tax exemption announced by the Prime Minister on Feb 4 has now become three years," he told a Barisan Nasional ceramah in Yong Peng on Saturday (July 5).
He added that he was prepared to produce the relevant documents if his claim was challenged.
Dr Wee said the shorter exemption period would have significant financial implications for TAR UMT, which is owned and operated by the TARC Education Foundation on a non-profit basis.
He said all income generated by the university is channelled back into education, including student facilities, campus expansion, scholarships and teaching resources, rather than distributed as profits.
According to Dr Wee, TAR UMT has invested more than RM200mil in expanding its campus, including building a multi-storey car park, lecture halls, sports facilities and student amenities to cater to its growing student population.
Dr Wee noted that the approval letter exempts only donations received by the foundation from tax, but does not extend the exemption to operating income such as tuition fees.
Once the three-year exemption expires, he said the university could face tax liabilities amounting to tens of millions of ringgit annually.
"The biggest issue is not donations. Donations remain tax exempt. The real problem is if tuition fees become taxable.
"It will place a heavy burden on the university," he said.
Dr Wee said TAR UMT currently has more than 36,000 students and has continued expanding its facilities over the years to meet growing demand while keeping its fees affordable.
He said the university reinvests its surplus into campus development and provides more than RM50mil annually in scholarships and financial aid to students.
"TAR UMT was established to provide affordable higher education. We cannot allow its foundation to be undermined," he said.
On Feb 4, Anwar announced that the government had approved a 10-year income tax exemption for education-based foundations and bodies, including the TARC Education Foundation, during a visit to TAR UMT's main campus in Setapak.
He also announced a RM40mil matching grant for the university.
Dr Wee said the latest approval letter did not reflect the Prime Minister's announcement and called on the government to reinstate the original 10-year exemption.
He added that the Board of Trustees intended to pursue the matter with the government, saying the university's non-profit mission was to provide affordable higher education and should continue to receive the support that had been publicly pledged.
Meanwhile, Transport Minister Anthony Loke, when asked about the matter on the sidelines of a ceramah in Masai on Sunday (July 5) night, claimed there were some issues of non-compliance by TAR UMT.
“I contacted the Finance Ministry and also the Prime Minister and there are no issues here.
“It is our policy to give a 10-year exemption to all education institutions. It’s just that TAR UMT has several matters that it did not comply with,” said Loke.
Loke said that once the issues were sorted out, then the 10-year income tax exemption would be reinstated for TAR UMT.
