PETALING JAYA: The government has approved a 10-year extension of Tunku Abdul Rahman University of Management and Technology's (TAR UMT) income tax exemption, it announced on Wednesday (July 8).
Government spokesman Datuk Fahmi Fadzil said the decision was made after the Cabinet considered the issue and acknowledged the university's special role in providing quality and affordable private higher education.
"The Prime Minister Datuk Seri Anwar Ibrahim has approved the extension of TAR UMT's tax exemption for a period of 10 years," he said in a statement on the Cabinet meeting's decisions.
However, Fahmi said TAR UMT would remain subject to compliance reviews throughout the approval period.
These include the requirement to submit audited financial statements annually, in accordance with Subsection 44(6) of the Income Tax Act 1967.
The announcement comes days after MCA president Datuk Seri Dr Wee Ka Siong claimed the university had received an approval letter granting only a three-year tax exemption instead of the 10 years announced by Anwar in February.
Dr Wee, who is also chairman of the TAR UMT Board of Trustees, said the shorter exemption period would have significant financial implications for the non-profit university, whose surplus is reinvested into campus development, scholarships and student facilities rather than distributed as profits.
He also claimed the approval letter exempted only donations received by the foundation from tax, but did not extend the exemption to operating income such as tuition fees, warning that the university could face tax liabilities amounting to tens of millions of ringgit annually once the exemption expired.
During a visit to TAR UMT's main campus in Setapak 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, as well as a RM40mil matching grant for the university.
