Utar’s tax bill cancelled as it’s a non-profit education institute, says Anwar

 

The Cabinet said it had agreed to write off the RM83 million owed by Universiti Tunku Abdul Rahman in taxes and penalties. (Facebook pic)

PETALING JAYA: 

The government decided to write off Universiti Tunku Abdul Rahman’s (Utar) RM83 million tax bill in line with Putrajaya’s policy of providing tax exemptions to non-profit educational entities, says Prime Minister Anwar Ibrahim.

Anwar said the delay in approving the MCA-linked Utar’s tax exemption was because the university and foundation it was established under, Utar Education Foundation (Utaref), had yet to operate as separate entities with distinct audited accounts.

Speaking at the Associated Chinese Chambers of Commerce and Industry of Malaysia’s annual general meeting today, the prime minister said he has asked Utaref to separate its operational framework into commercial and educational entities.

The issue of tax exemption for Utar, which is a Chinese university, raises the question: what is our policy? Our policy is that non-profit education is exempt from tax,

 he said.

“If it’s about developing faculties, allowing underprivileged students to study, or waiving tuition fees, we will exempt taxes.

“I see no problem with that; we just announced the approval late because Utaref hasn’t been restructured yet.

However, they recently informed us that they would restructure within a year. In the meantime, they have requested tax exemption for all approvals related to education for underprivileged children.

Last week, it was reported that Utar was hit with an RM83 million tax bill, which included fines of up to 45%.

Deputy finance minister Lim Hui Ying had said Utar would be appealing the Inland Revenue Board’s (LHDN) decision to impose outstanding taxes and penalties on its income.

On Thursday, MCA secretary-general Chong Sin Woon said a letter from Treasury secretary-general Johan Mahmood Merican notified Utar of the Cabinet’s decision to write off the RM83 million tax bill.

However, the letter also stated that the university and Utaref must operate as separate entities with distinct audited accounts from next year. - FMT