Latest news with #InlandRevenueBoard
The Star
6 hours ago
- Business
- The Star
TNB hit with RM609mil tax bill
TNB said it is evaluating its available legal options to address this notice of additional assessment. KUALA LUMPUR: Tenaga Nasional Bhd (TNB) has received a notice of additional assessment amounting to RM609.03mil from the Inland Revenue Board (IRB) for the 2023 assessment year. In a filing with Bursa Malaysia, the utility company said the notice was issued on July 30, 2025. 'In light of the Federal Court's decision on a similar notice issued to TNB for the 2018 assessment year, TNB is currently evaluating its available legal options to address this notice of additional assessment,' the company said. It added that the evaluation also considers the fact that TNB has already applied for investment allowance under Schedule 7B of the Income Tax Act 1967, which includes claims for the 2023 year of assessment. — Bernama
The Star
14 hours ago
- Business
- The Star
TNB hit with RM609mil tax bill, reviewing legal options
KUALA LUMPUR: Tenaga Nasional Bhd (TNB) has received a notice of additional assessment from the Inland Revenue Board amounting to RM609.03mil for the year of assessment (YA) 2023. In a filing with Bursa Malaysia, TNB said it is currently evaluating its available legal options to address the assessment, in light of the Federal Court's earlier decision involving a similar notice for YA 2018. 'This evaluation takes into consideration that TNB has already submitted an application for Investment Allowance under Schedule 7B of the Income Tax Act 1967 (including those for YA 2023) to the Minister of Finance,' TNB said.
New Straits Times
a day ago
- Business
- New Straits Times
Scrapping luxury tax a relief for retailers, say experts
KUALA LUMPUR: The government's decision to scrap the long-mooted High-Value Goods Tax (HVGT) is expected to ease compliance burdens on businesses, particularly those in the retail and luxury sectors. KPMG Malaysia head of tax Soh Lian Seng said while the government had officially shelved the standalone HVGT, it had not abandoned the idea of taxing luxury consumption. "Rather than introducing a brand-new tax with its own rules, thresholds and enforcement challenges, the government is leveraging an existing system that businesses are familiar with," said Soh. He added that the higher sales tax of five per cent or 10 per cent on luxury and discretionary items was likely to shift consumer behaviour, especially among price-sensitive buyers. While short-term demand might soften, he said, the fundamentals of Malaysia's luxury market were expected to remain strong, supported by rising affluence and continued interest from foreign tourists. Economist Dr Geoffrey Williams said the HVGT and low-value goods taxes distorted the market and imposed a significant administrative burden on the Inland Revenue Board. He said that these taxes generate so little revenue that they were hardly worth the effort and cost of implementation. Removing the tax would simply return the system to the status quo, with no significant impact other than the forgone revenue, he added. Nevertheless, Williams said, there should be a full review of the taxation system as it was a mass of ad-hoc taxes for ill-defined purposes, inefficient in raising revenue and causing market distortions. He said one alternative is an electronic payments tax, which is a tiny tax on electronic transactions. SME Association of Malaysia national president Dr Chin Chee Seong said the association believed there should not have been a luxury goods tax in the first place, as it was difficult to implement effectively. He added that if luxury items were taxed and become too expensive locally, affluent consumers might buy them overseas, such as in Singapore or other countries. "Those who can afford luxury items often travel, so imposing such a tax doesn't make much sense to us." Overall, Chin said, the removal of the luxury goods tax helped create a more level-playing field for domestic businesses. He added that businesses and SMEs were relieved and welcomed the move, as it eased the burden on businesses operating in the luxury segment. In a written parliamentary reply on Tuesday, Prime Minister Datuk Seri Anwar Ibrahim, who is finance minister, said the government discontinued the implementation of the HVGT. "However the principles for the imposition of the HVGT have been incorporated into the sales tax review where luxury and choice goods are taxed at a rate of five per cent or 10 per cent." He added that the revision of the Sales and Service Tax, which took effect on July 1 this year, was expected to increase revenue by RM5 billion in 2025 and reach RM10 billion in 2026. Additional reporting by Zaf Seraj and Iylia Marsya Iskandar
The Star
2 days ago
- Business
- The Star
Lien Hoe Hit with RM1.39mil tax bill
KUALA LUMPUR: Lien Hoe Corp Bhd has received additional tax assessments totalling RM1.39mil from the Inland Revenue Board (IRB) for seven years of assessment. In a filing with Bursa Malaysia, the property group said it received notices of assessment on July 29, covering the years 2017 to 2023. The total sum of RM1.39mil includes surcharges and relates to deemed interest income under Section 140A of the Income Tax Act. 'This additional income tax payable will be recognised in the financial statements for the three-month period ended June 30, 2025. 'It is expected to negatively impact both net asset value and earnings by 0.42 sen per share for the financial year ending Dec 31, 2025,' Lien Hoe said.
The Star
4 days ago
- Business
- The Star
TNB assessing effect of tax ruling, says it will not affect performance
Petaling Jaya: Tenaga Nasional Bhd (TNB) is assuring Malaysians that its focus remains on its core mission and long-term priorities, with prudent financial management and consistent cash flow underpinning its operations. The national utility titan has been in the limelight this month, especially after the Federal Court ruling on July 2, in favour of the Inland Revenue Board (IRB) in TNB's 2018 tax dispute. The court decided that TNB should have applied for an investment allowance under Schedule 7B of the of the Income Tax Act 1967 rather than the reinvestment allowance under Schedule 7A. The technicality has significant implications for TNB's outstanding tax cases for other years, with total outstanding tax disputes being estimated at RM5.05bil, which represents about 6% of the group's market capitalisation. The High Court has granted leave to TNB, through its subsidiary TNB Western Energy Bhd, to commence a judicial review against the Inland Revenue Board (IRB) in relation to a tax assessment totalling RM291.6mil for 2018. In a filing to Bursa Malaysia on July 22, TNB said it was also granted an interim stay of all further proceedings, including the enforcement of the assessment notice. The High Court has scheduled case management on Aug 5. In light of the saga, TNB emphasised its robust financial strength and operational stability, underpinned by a strong regulated business framework, consistent cash flows, and prudent financial management. 'We remain steadfast in delivering reliable electricity supply to the nation while navigating evolving operational and financial landscapes. 'Guided by prudent management and a clear strategic direction, TNB continues to strengthen its fundamentals to weather challenges and drive Malaysia's energy transition agenda forward,' it says. In addition, it reveals it is continuing its pursuit of legitimate tax claims, which interestingly still includes the Investment allowance under Schedule 7B of the Income Tax Act 1967, as part of its strategy to manage the RM5.05bil tax bill. Acknowledging the effect of the hefty tax bill, the group is still in the midst of assessing the full financial implications of the Federal Court's ruling. This is all the more relevant, given TNB's profitable performance, which has ranged from RM600mil to RM1.2bil in the last five years, with the group recognising that the decision of the Federal Court could have a potential negative impact on its earnings and net assets for this year (FY25). Most importantly for the Malaysian public though, TNB stresses there is no reason for the ruling to affect the group's operational performance. 'We remain focused on delivering reliable electricity supply, advancing our long-term strategic priorities, including supporting Malaysia's energy transition, and managing our financial position responsibly. 'TNB continues to invest in Malaysia's energy future, with major projects under the National Energy Transition Roadmap (NETR) to deliver over 3,000MW of renewable energy capacity by 2040.' Furthermore, it said the tax bill is manageable relative to its cash reserves, minimising the risk to dividend payouts. Already shifting its focus to brighter scenes, the group said that it plays a pivotal role in enabling Malaysia's energy transition and supporting the goals outlined in the NETR. Its focus from this year to 2027 is on strengthening and modernising the National Grid, which TNB views as a critical enabler of the energy transition, particularly in supporting the higher renewable energy (RE) penetration targeted under the NETR. 'We are increasing our capital expenditure, with RM42.8bil approved to ensure our grid is reliable, resilient, and flexible enough to accommodate higher RE penetration and evolving energy demands, because we believe there is no transition without transmission.' Crucially, TNB has largely remained in the good books of analysts, with a handful of research houses keeping it among their 'buy' recommendations, including CIMB Research, Kenanga Research and Maybank Investment Bank Research. Nevertheless, CIMB Research, in its latest report on the utility company this month, conceded that more clarification from TNB regarding the potential financial impact from the IRB ruling, which some investors believe will only be clarified when the company releases its financial results for December. Specifically, the research house said it would find out how much of the IRB's cumulative notices of additional assessment may be offset by claiming for investment allowance under Schedule 7B, although it observed that TNB is currently still trading at a reasonable forecast enterprise value over earnings before interest, taxes, depreciation and amortisation of 7.6 times and offers decent FY25 to FY27 dividend yields of 3.1% to 3.8%.
