PETALING JAYA: The recent RM83 million tax waiver granted to Universiti Tunku Abdul Rahman (UTAR) was due to the government's policy not to impose taxes on non-profit educational entities, Prime Minister Datuk Seri Anwar Ibrahim said.
He added that the delay in granting the tax exemption to UTAR was due to the university still being under the Utar Education Foundation (UTAREF), which has not yet separated its structure between commercial business operations and education.
He said the foundation has been asked to separate its operational structure between commercial business dealings and educational activities.
"Regarding the tax exemption for UTAR, a Chinese university, what is our policy? We exempt non-profit education from taxes.
"If it's for developing faculties, enabling poor students to study, or waiving tuition fees, we exempt taxes.
"For me, there's no issue and we just announced the approval late because the foundation hasn't been separated.
"Recently, they informed us that within a year, they would separate, but in the meantime, they are requesting tax exemptions for all approvals for the education of poor children," he said in his speech at the Associated Chinese Chambers of Commerce and Industry of Malaysia 78th Annual General Meeting held today.
Anwar said the government does not consider ethnicity when assisting poor students.
"When it comes to education for poor children, it doesn't matter if the child is Malay, Chinese, or Indian," he said.
Deputy Finance Minister Lim Hui Ying on Oct 4, in a statement, said UTAR and the UTAREF are treated as two separate entities by the Inland Revenue Board.
She said UTAR is clarified as a private university and had never been given any tax-exempt status, while UTAREF's tax-exempt status has not been revoked as reported by the media.
On Oct 9, it was reported that the cabinet approved the waiver of an RM83 million tax bill for UTAR, which was owed to the IRB for outstanding taxes and penalties.