By Emmanuel Samarathisa
TENAGA Nasional Bhd (TNB) has begun legal proceedings against the Inland Revenue Board of Malaysia (IRB) for slapping the national power company with a RM4 bil tax bill.
“TNB has today commenced legal proceedings to challenge the said notices for the years of assessment 2015 to 2017 raised by the Inland Revenue Board of Malaysia,” the company said in a Dec 2 filing with Bursa Malaysia.
On Nov 28, IRB said TNB owed a total of RM3.98 bil for assessment years 2015-2017. The bill comprises RM1.43 bil for 2015, RM1.24 bil for 2016 and RM1.3 bil for 2017.
TNB immediately responded that the company is appealing against the notices. “Based on the legal advice obtained from our tax solicitors, TNB has a good basis to contend that there is no legal and factual basis for IRB to issue the said notices,” TNB said in a Nov 28 bourse filing. “Accordingly, TNB will be appealing against the said notices.”
After the announcement, TNB’s share price dropped 4% from RM13.72 on Nov 28 to RM13.07 on Dec 2.
The tax charge serves as a case of deja vu for the power company. In Nov 23, 2015, TNB said it received notices for the years of assessment 2013 and 2014 amounting to RM2.07 bil.
Back then, TNB repeated the same response to the charge that it would be “appealing against the said notices and the appeal process has commenced.”
The tax bill was 34% of TNB’s net profit of RM6.12 bil for the financial year ended Aug 31, 2015. TNB’s share price dropped 1.76% on Nov 24 to RM13.36 but staged a rebound the day after.
TNB would soon bring IRB to court before both parties settled the dispute on Dec 7, 2016, when Tenaga opted instead for an appeal to the Special Commissioners of Income Tax (SCIT) to state its case for qualifying for a reinvestment allowance.