PETALING JAYA: Prime Minister Datuk Seri Anwar Ibrahim has approved a 10-year income tax exemption for Tunku Abdul Rahman University of Management and Technology (TAR UMT).
This came after MCA president Datuk Seri Dr Wee Ka Siong revealed that TAR UMT had received an approval letter, granting only a three-year tax exemption.
Government spokesman Datuk Fahmi Fadzil (pic) 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 has approved the extension of TAR UMT’s tax exemption for a period of 10 years,” he said in a statement yesterday.
However, Fahmi said TAR UMT would still be subjected to compliance reviews throughout the approval period.
These include the requirement to submit audited financial statements yearly, in accordance with Subsection 44(6) of the Income Tax Act 1967.
On July 5, 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 university, which is owned and operated by the TARC Education Foundation on a non-profit basis.
He said all income generated by TAR UMT is channelled back into education, including student facilities, campus expansion, scholarships and teaching resources, rather than distributed as profits.
Dr Wee also said 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.
He highlighted that once the three-year exemption expires, TAR UMT could face tax liabilities amounting to tens of millions of ringgit annually.
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.
Yesterday’s Cabinet decision confirms the Prime Minister’s approval for the 10-year tax exemption, subject to continued compliance with the conditions under the Income Tax Act.
