In a significant move that has provided much-needed relief to Universiti Tunku Abdul Rahman (Utar), the Cabinet has cancelled the university's massive RM83 million tax bill. This decision, a direct result of Prime Minister Dato' Seri Anwar Ibrahim’s instruction, lifts a financial burden that could have impacted Utar’s operations and future educational offerings.
The hefty bill, originally imposed by the Inland Revenue Board (LHDN), included fines amounting to 45% of the total sum, which made the financial strain even more severe. However, following Anwar’s guidance, Treasury Secretary-General Datuk Johan Mahmood Merican officially notified the university of the government’s decision to nullify the debt, offering a lifeline to Utar and its educational mission.
In a letter dated October 8, 2024, addressed to Utar Education Foundation Board of Trustees Chairman Tan Sri Sak Cheng Lum, Johan detailed the resolution of the matter. According to subsections 127(3A) and 44(6B) of the Income Tax Act 1967, Utar was granted an income tax exemption for the years 2017 to 2023. This retrospective tax relief ensures that the university will not be liable for any back taxes for those years, allowing it to refocus on its educational goals without the shadow of financial penalties.
However, Utar will still be subject to taxation from the 2024 assessment year onward, marking a shift in its financial responsibilities. Additionally, the Utar Education Foundation (UEF) was granted a separate five-year tax exemption, from January 1, 2025, to December 31, 2029, under the same Act, but with the condition that the exemption applies only for educational purposes.
One key stipulation moving forward is the separation of Utar and UEF into distinct legal entities with individual audited accounts. The government did not approve UEF’s request to operate Utar as a single entity under the foundation. This decision ensures transparency and accountability for both organisations, each tasked with managing their operations independently.
Transport Minister Anthony Loke confirmed the government’s intervention, stating that Anwar had directed Johan to send the official letter to Utar, resolving the tax dispute. Loke’s statement, reported by Sin Chew Daily, affirmed the government’s stance in supporting educational institutions while upholding financial integrity.
Previously, Deputy Finance Minister Lim Hui Ying mentioned that Utar had planned to appeal the tax decision before the government stepped in. The cancellation of the RM83 million bill not only removes an immediate financial threat but also reaffirms the government's commitment to ensuring educational institutions can thrive without undue financial burden.
By: Kpost
Information Source: Malaymail
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