RM8.32bil TNB tax penalty will hurt the people, says Dr Wee
The MCA president said the excessive penalty stemmed from a tax relief claim made by TNB under Schedule 7A of the Income Tax Act — a practice it had followed for decades.
However, Dr Wee noted that under current law, the Inland Revenue Board (LHDN) has the authority to decide which tax provisions a company must use, regardless of court rulings.
'This means that even though the Federal Court found TNB not at fault, the company is still required to pay an upfront penalty of RM1.76bil, while the remaining RM6.5bil awaits a final decision from the Finance Ministry,' he said.
Dr Wee stressed that the dispute was not about wrongdoing such as tax evasion or fraud, but purely an issue of interpretation.
'Even the Federal Court has clearly stated that TNB was not wrong in using Schedule 7A for its relief application,' he added.
He warned that such a penalty would cause significant financial losses to TNB and directly affect the investment value of public savings funds such as the Employees Provident Fund (EPF), Tabung Haji, and Permodalan Nasional Berhad (PNB).
'The reality is, if this extraordinary tax burden continues, TNB's share value could plummet — reducing the value of public savings. And who ultimately bears the cost? The people,' he said in a Facebook video posted on Friday (Aug 8).
Dr Wee also criticised Kampar MP Chong Zhemin, who claimed in Parliament that the issue would not affect the public.
He said Chong's comparison to roadside hawkers was illogical.
'Roadside hawkers don't hold 63% of the rakyat's investment funds, nor do they face billion-ringgit losses that would effectively drain public savings into government coffers,' Dr Wee said, adding that Chong had himself acknowledged that 63% of TNB's shares are held by public savings funds like EPF and Tabung Haji.
'So what's the logic in saying this doesn't affect the rakyat? Anyone listening would be shaking their head in disbelief,' he said.
'If the government is truly serious about fairness and accountability, now is the time to approve TNB's appeal and correct this situation. Do not allow public savings to be depleted due to bureaucratic shifts in tax interpretation.'
The issue arose after the Federal Court ruled on July 2 in favour of LHDN in TNB's 2018 tax dispute, deciding that TNB should have applied for an investment allowance under Schedule 7B instead of the reinvestment allowance under Schedule 7A.
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