KUALA LUMPUR: 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, prompting the institution to appeal what it describes as an unfair and damaging decision.
MCA president Datuk Seri Dr Wee Ka Siong, who chairs the TARC Education Foundation, said the foundation recently received a letter from the Finance Ministry granting a tax exemption from Jan 1, 2026, to Dec 31, 2028.
This development comes despite Prime Minister Datuk Seri Anwar Ibrahim announcing during a visit to TAR UMT in February that education foundations would automatically receive a 10-year extension.
“Even more unacceptable is that the Finance Ministry has overturned the long-standing practice by imposing highly restrictive new conditions.
“Under these conditions, only public donations will continue to enjoy tax exemption, while the university’s principal sources of operating income, including student tuition fees, interest income and rental income, will no longer qualify for tax exemption and will instead be subject to taxation,” he told a press conference yesterday.
“Every ringgit received by TAR UMT, whether from donations or tuition fees, is fully reinvested into the university’s development, facilities and educational mission,” he added.
“The tax restrictions not only contradict the original purpose for which the university was established but also place an unjustified burden on a non-profit educational institution.”
Dr Wee asked for the restoration of TAR UMT’s long-standing tax exemption status.
“We are not a charity organisation. We are running a university. Tuition fees are used to pay lecturers’ salaries, maintain facilities and provide affordable education.
“To treat tuition fees as taxable income goes completely against how this university has operated for decades,” he said.
Dr Wee also questioned why the exemption period had been reduced from the 10 years publicly announced by the Prime Minister.
“If the Prime Minister announced 10 years and we receive only three years with conditions that completely change how we operate, who are we supposed to believe?” he asked.
He said the TARC Education Foundation’s previous tax-exempt status expired on Jan 1 this year and that its renewal application had been submitted more than a year ago.
The foundation only received the ministry’s June 18 approval letter in recent weeks.
Among the new requirements, he said, were the establishment of a separate fund and compliance with additional Inland Revenue Board (LHDN) guidelines, including restrictions on how tax-exempt income could be used for operating expenses.
Dr Wee said such conditions would make it impossible for the university to continue allocating about 75% of its revenue to lecturers’ salaries and educational expenses.
He also rejected the ministry’s suggestion that the foundation strengthen its governance and management of donations, describing it as baseless.
“Every year we submit audited accounts. Every sen is accounted for. No trustee has ever taken a single sen from the foundation,” he said, noting that the foundation is subject to oversight by the Companies Commission of Malaysia, the Higher Education Ministry, LHDN and the Auditor-General.
TARC Education Foundation secretary Ong Whee Tiong said the foundation had consistently complied with all statutory reporting requirements and questioned a new requirement to submit audited accounts within four months instead of the standard seven months.
“These new requirements are simply not practical for an organisation of our size,” he said.
Dr Wee stressed that the foundation, a company limited by guarantee, has no shareholders and does not distribute profits or dividends.
Any surplus is reinvested into campus expansion, facilities and keeping fees affordable.
He noted that TAR UMT had invested more than RM200mil in facilities and continues to operate five branch campuses, including those that are not financially profitable, to expand access to higher education.
“We are helping the government educate more than 36,000 students at affordable fees and easing the burden on public universities. We have produced over 300,000 graduates for Malaysia.
“We are not asking for more money. We are simply asking the government to honour its commitment and allow us to continue serving future generations and, more importantly, to provide higher education for underprivileged students,” he said.
Dr Wee said the foundation would formally appeal to the Finance Ministry and seek the Prime Minister’s intervention, noting that the Finance Minister has the authority under the Income Tax Act to review the decision.
