FMT:
TNB facing RM5bil tax bill after Federal Court ruling
The sum is part of RM9.25 billion in additional tax assessments issued by LHDN
On Wednesday, the Federal Court ruled that TNB is a utility company, and not a manufacturing concern eligible to claim reinvestment allowance.
PETALING JAYA: National utility company Tenaga Nasional Bhd is facing a RM5.05 billion tax bill following a Federal Court rulIng that it is not eligible to claim reinvestment allowance.
Citing TNB’s 2024 annual report, The Edge reported today that the Inland Revenue Board (LHDN) issued the company RM9.25 billion in additional tax assessments.
However, RM2.44 billion in penalties was waived through settlements.
“TNB paid RM1.76 billion in December 2020, leaving an estimated RM5.05 billion still outstanding,” the report by the financial portal added.
Yesterday, it was reported that TNB’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.
Its shares fell as much as 74 sen, or over 5%, to its lowest level since June 3, with the counter closing at RM14.02.
On Wednesday the apex court overturned a Court of Appeal ruling that found the national utility company to be in the business of manufacturing electricity.
It said TNB should actually have been considered a utility company under Schedule 7B of the Income Tax Act 1967 (ITA).
The dispute arose when LHDN disallowed TNB’s claim under Schedule 7A of the ITA on the basis that the generation, distribution and transmission of electricity did not constitute 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.
Citing TNB’s 2024 annual report, The Edge reported today that the Inland Revenue Board (LHDN) issued the company RM9.25 billion in additional tax assessments.
However, RM2.44 billion in penalties was waived through settlements.
“TNB paid RM1.76 billion in December 2020, leaving an estimated RM5.05 billion still outstanding,” the report by the financial portal added.
Yesterday, it was reported that TNB’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.
Its shares fell as much as 74 sen, or over 5%, to its lowest level since June 3, with the counter closing at RM14.02.
On Wednesday the apex court overturned a Court of Appeal ruling that found the national utility company to be in the business of manufacturing electricity.
It said TNB should actually have been considered a utility company under Schedule 7B of the Income Tax Act 1967 (ITA).
The dispute arose when LHDN disallowed TNB’s claim under Schedule 7A of the ITA on the basis that the generation, distribution and transmission of electricity did not constitute 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.
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