Prime Minister Datuk Seri Anwar Ibrahim has clarified that Universiti Tunku Abdul Rahman (UTAR), which owes RM83 million to the Internal Revenue Board (IRB), will benefit from a tax exemption, as the government does not tax non-profit educational institutions. The delay in granting the exemption, he explained, is tied to UTAR’s structural issues, as the university is still under Yayasan Tunku Abdul Rahman (TAR), which has yet to separate its commercial business activities from its educational mission.
Speaking at the 78th Annual General Meeting of the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM), Anwar addressed concerns about UTAR’s tax status. He emphasized that the government’s policy is to support educational initiatives, especially those aimed at providing opportunities to underprivileged students. "Our policy is clear—we do not tax non-profit education entities. If a faculty is developed to assist poor students, particularly by offering tuition waivers, they qualify for tax exemption," Anwar said.
He noted that the delay in UTAR’s exemption was not due to a lack of support but rather the university’s request for more time to separate its foundation’s operations from commercial activities. "Recently, they asked for a one-year grace period to complete the separation, but they have also requested tax exemption in the meantime for initiatives benefiting poor children," Anwar added, underscoring the government’s commitment to education for the underprivileged.
The Prime Minister had previously announced that the government would resolve UTAR’s tax dispute with the IRB. According to reports, the tax arrears and fines, amounting to RM83 million, will be waived, clearing UTAR of its tax obligations. This decision aligns with the government's broader goal of supporting educational institutions that focus on non-profit work.
Deputy Finance Minister Lim Hui Ying had earlier clarified that while the UTAR Education Foundation, which oversees the university’s educational activities, received tax exemption in 2003 under Section 44(6) of the Income Tax Act 1967, the exemption did not extend to UTAR itself due to the structural overlap between its commercial and educational operations. Anwar’s latest remarks suggest that once the separation is complete, UTAR will be able to fully benefit from the exemption moving forward.
With the tax dispute now on track for resolution, UTAR can continue to focus on its core mission of providing affordable education, especially for financially disadvantaged students, without the looming financial burden of unpaid taxes.
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