KUALA LUMPUR, Oct 9 — The Cabinet has provided a major relief to Universiti Tunku Abdul Rahman (Utar) by cancelling the RM83 million tax bill it owed to the Inland Revenue Board (LHDN) for outstanding taxes and penalties.

This decision followed instructions from Prime Minister Datuk Seri Anwar Ibrahim, who also serves as finance minister, directing Treasury Secretary-General Datuk Johan Mahmood Merican to officially notify Utar.

In a letter sighted by Malay Mail from Johan to Utar Education Foundation Board of Trustees chairman Tan Sri Sak Cheng Lum, dated October 8, 2024, the government signalled the resolution of the tax issue.

The bill, initially imposed by LHDN, included fines amounting to 45 per cent of the total.

However, under subsections 127(3A) and 44(6B) of the Income Tax Act 1967, the Ministry of Finance granted Utar income tax exemption for the years 2017 to 2023.

This retrospective exemption ensures the university will not be liable for taxes during that period, though it will be subject to taxation from the 2024 assessment year onwards.

Additionally, the Utar Education Foundation (UEF) was approved under subsection 44(6B) of the same Act for a five-year tax exemption from January 1, 2025, to December 31, 2029, but solely for educational purposes.

The ministry also stipulated that from January 2025, Utar and UEF must operate as separate entities, each with distinct audited accounts.

However, UEF’s request to manage Utar as a single entity under the foundation was not approved, maintaining both organisations as legally distinct.

Transport Minister Anthony Loke, who was quoted in a separate report by Chinese daily Sin Chew Daily yesterday, confirmed that Anwar had instructed Johan to issue the formal letter to Utar, marking the end of the tax issue.

Loke was responding to queries regarding the government’s decision to waive the sum after it was imposed by LHDN.

Previously, Deputy Finance Minister Lim Hui Ying had said that Utar intended to appeal LHDN’s decision before the government’s intervention.