2 days ago
- Business
- Free Malaysia Today
TNB's share price falls after Federal Court decision on LHDN case
The dispute arose when the Inland Revenue Board disallowed Tenaga Nasional Bhd's claim that the generation, distribution and transmission of electricity was not manufacturing of electricity.
PETALING JAYA : Tenaga Nasional Bhd's shares plunged a day after the Federal Court overturned a ruling in the largest corporate tax dispute in the country's history, resulting in losses of over RM3 billion in its market capitalisation.
TNB's shares fell as much as 74 sen, or over 5%, to its lowest level since June 3, The Edge reported.
The counter closed at RM14.02.
Yesterday, the apex court overturned a Court of Appeal ruling that found the national utility company to be in the business of manufacturing electricity.
The Federal Court said TNB should actually have been considered a utility company under Schedule 7B of the Income Tax Act 1967 (ITA).
The dispute arose when the Inland Revenue Board (LHDN) disallowed TNB's claim under Schedule 7A of the ITA on the basis that the generation, distribution and transmission of electricity was not manufacturing of electricity.
TNB had also argued that it was only a service provider.
In 2022, the High Court allowed TNB's judicial review application to set aside LHDN's RM1.8 billion tax assessment for the year 2018.
Two years later, the Court of Appeal upheld the High Court's ruling. TNB has already paid the sum.
Today, analysts told The Edge about the possibility of hefty provisions and potential implications for the company's other outstanding court cases.
The Edge quoted CIMB Securities as expressing concerns that the case might set a legal precedent for TNB's other pending court cases for notices of additional assessment from LHDN.
