MCA president defends varsity’s non-profit status amid LHDN’s RM83mil tax bill

KUALA LUMPUR: A move by the Inland Revenue Board (LHDN) to impose outstanding taxes and penalties amounting to RM83mil on not-for-profit Universiti Tunku Abdul Rahman (UTAR) has led to a controversy.

Deputy Finance Minister Lim Hui Ying said the LHDN stated that UTAR has never been granted any tax-exempt status, unlike UTAR Education Foundation, which was granted such an exemption under Section 44(6) of the Income Tax 1967 on July 1, 2003.

“LHDN maintains that UTAR Education Foundation and UTAR are treated as two different entities for tax purposes.

“Accordingly, LHDN contends that income generated by UTAR Education Foundation continues to enjoy tax-exempt status, whereas income generated by UTAR does not,” she said in a statement yesterday.

However, MCA president and UTAR university council member Datuk Seri Dr Wee Ka Siong holds a different view on the issue.

UTAR, he said, is owned by UTAR Education Foundation under the Private Higher Educational Institutions Act 1996 (Act 555).

“Under Act 555, a university can be set up via a company limited by guarantee (CLBG), which is like a Sendirian Berhad but for non-profit. It is a foundation,” he said.

Dr Wee pointed out that the permit to set up the university was given to the foundation.

“So, how can you say it’s a separate entity? The foundation is set up for this sole purpose. There is no other business,” he said.

On the issue of the RM83mil tax bill slapped on UTAR, Dr Wee said he had met Prime Minister Datuk Seri Anwar Ibrahim twice, in June and July, to explain the setting of UTAR under Act 555 and the element of tax exemption.

He said over the years, LHDN representatives had visited UTAR, and the university management had also sent their financial reports for audits.

“UTAR was given the letter of clearance all this while. Regarding the RM83mil tax bill, we seek the Prime Minister’s help to cancel it.

“He said he would assist and asked us to write to LHDN. We did so and followed all the necessary appeal procedures.

“The matter was given an extension up to Sept 30 following the meeting with the Prime Minister. UTAR representatives also went to see the relevant LHDN officers,” he said.

Dr Wee added that for the tax bill cancellation to happen, the documentation must first be given to the Finance Minister, who in turn, will submit it to the Prime Minister.

Anwar also holds the Finance Minister portfolio.

“Steps have been taken to resolve the matter and we are following up on this closely,” said Dr Wee.

UTAR was officially launched on Aug 13, 2002, as a private university aimed at providing affordable and quality education.

UTAR’s enrolment has since reached about 20,000 students with campuses located in Kampar, Perak, and Sungai Long, Selangor.

Since its inaugural convocation in 2005, over 86,900 students have graduated from the university.

https://www.thestar.com.my/news/nation/2024/10/05/utar-is-tax-exempted-says-wee