PUTRAJAYA: The tax exemption granted to the TARC Education Foundation is subject to conditions stipulated under tax laws, said the Finance Ministry.
In a statement on Monday (July 6), the ministry noted that Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim had announced on Nov 27, 2025, that eligible institutions, organisations, or charitable funds may be granted tax exemption for a maximum period of 10 years under Subsection 44(6) of the Income Tax Act 1967.
“However, such approval is not automatic. It is subject to compliance with the conditions prescribed under the tax laws,” read the statement that came after MCA president Datuk Seri Dr Wee Ka Siong raised the matter about the tax exemption being shortened to three years while campaigning in the Johor state election on Sunday (July 5).
The ministry said the government appreciates and recognises the role of the TARC Education Foundation in providing quality and affordable private higher education to Malaysians, and denied that the government reneged on its promise on the tax exemption.
According to the ministry, upon its review of the TARC Education Foundation's application to extend its tax exemption under Subsection 44(6), following the expiry of the existing approval in 2025, the ministry found several conditions had not been fully met.
Among the outstanding matters are improvements that the foundation needs to make in governance and donation management.
“Taking into account the TARC Education Foundation’s important role in the education sector, the government has adopted a prudent approach by granting a temporary interim extension of the tax exemption for three years.
“This extension ensures that the foundation's tax-exempt status remains in effect while the required measures to comply with the conditions are being finalised,” said the ministry, which also expressed its readiness to assist in facilitating the TARC Education Foundation’s efforts at improvement.
"If all the required conditions are fulfilled, the TARC Education Foundation will be eligible for the approval of a full 10-year tax exemption, in line with the government's announcement," it said.
“The government remains committed to supporting education, including the role of the TARC Education Foundation, and in view of this, the matter should not be distorted.
“All tax exemption approvals must be done in accordance with the law, compliance conditions, and good governance principles,” the ministry added.
The TARC Education Foundation is a non-profit organisation incorporated in Malaysia in 2013 to own and operate the Tunku Abdul Rahman University of Management and Technology (TAR UMT).
