Latest news with #RM291.6mil
The Star
a day 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%.
The Star
7 days ago
- Business
- The Star
TNB gets leave for judicial review
PETALING JAYA: The High Court granted leave to Tenaga Nasional Bhd (TNB), through its subsidiary TNB Western Energy Bhd, to commence judicial review against the Inland Revenue Board (IRB) in relation to a tax assessment totalling RM291.6mil for the financial year ended December 2018. In a filing with Bursa Malaysia yesterday, TNB said it was also granted an interim stay of all further proceedings, including the enforcement of the assessment notice, until the disposal of the substantive hearing. The High Court scheduled a case management on Aug 5. Earlier this month, the Federal Court ruled in favour of the IRB concerning an additional tax assessment, also for 2018. The court overturned earlier High Court and Court of Appeal decisions that had favoured TNB, reinstating a tax bill initially set at RM1.81bil, which was reduced to RM1.25bil after a penalty remission in December 2020. The ruling clarified that TNB, as a utility company, should claim tax relief under schedule 7B (investment allowance) of the Income Tax Act 1967, not schedule 7A (reinvestment allowance) meant for manufacturers. This decision could lead to a total tax liability of RM5.05bil for TNB for 2013 to 2018 with potential additional assessments for 2020 and 2021. TNB is assessing the financial impact, which may affect its earnings and net assets for 2025, and plans to pursue investment allowance claims under schedule 7B. Although the ruling has set a precedent for TNB's tax obligations, it is not expected to impact its operations.
The Star
7 days ago
- Politics
- The Star
Asean News Headlines at 10pm on Tuesday (July 22, 2025)
Malaysia * Govt to form task force to review death penalty policy, direction, says Azalina * AGC's decision not to prosecute Zamri Vinoth, Firdaus Wong is 'selective enforcement', says MIC president * MACC to seek forfeiture of over RM169mil from Ismail Sabri * Penang doctor arrested for molesting female patient * 220 foreigners detained during check on 89 business premises in Shah Alam * TNB granted leave for judicial review on RM291.6mil tax bill * Woman jailed six months for concealing and dumping newborn's body * Sun bear sighting near Chukai school sparks safety concerns * File police, MACC reports over alleged threats, Kula tells Sabah graft whistleblower * Auditor-General's Report: RM48.873bil is total cost of audits, not leakages or losses, says Wan Suraya * Boy who nearly drowned in Melaka apartment pool dies in hospital * Causeway Link to engage in resolution talks following bus drivers' strikes * Selangor Customs seizes scrap metal worth RM9.17mil at PKFZ * Haze: PdPR to be 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ambassadors throw weight behind Cambodia's online scam crackdown * Anxiety and pride among Cambodia's future conscripts Laos * Laos to support women to develop and participate in nation building * Laos aims to continue advancing rural development Brunei * Japan vice-minister visits Japanese language pilot school in Brunei * Brunei team leaves for regional disaster exercise in Cambodia * Brunei student joins Asean youth volunteer programme Aseanplus * PM Anwar urges global leaders to unite in halting Gaza violence * Bangladesh mourns 31 dead in jet crash as students protest to demand accountability * Pakistan landslide after heavy rain kills five, with 15 missing * Chinese actor Zhang Yiyang executed by firing squad after murdering underage girlfriend * The ever-elegant Nelydia Senrose is back after a short break, this time in the much-anticipated 'Seindah Hujan Cinta' in Tonton * Fatal shooting in South Korea sparks alarm over DIY firearms * Taiwan-based Malaysian actor Hero Tai says 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The Star
7 days ago
- Business
- The Star
TNB granted leave for judicial review on RM291.6mil tax bill
PETALING JAYA: The High Court granted leave to Tenaga Nasional Bhd (TNB), through its subsidiary TNB Western Energy Bhd, to commence judicial review against the Inland Revenue Board (IRB) in relation to a tax assessment totalling RM291.6mil for the financial year ended December 2018. In a filing with Bursa Malaysia, TNB said it was also granted an interim stay of all further proceedings, including the enforcement of the assessment notice, until the disposal of the substantive hearing. The High Court scheduled a case management on Aug 5 for further directions. Earlier this month, the Federal Court ruled in favour of the IRB concerning an additional tax assessment, also for the year 2018. The court overturned earlier High Court and Court of Appeal decisions that had favoured TNB, reinstating a tax bill initially set at RM1.81bil, which was reduced to RM1.25bil after a penalty remission in December 2020. The ruling clarified that TNB, as a utility company, should claim tax relief under Schedule 7B (Investment Allowance) of the Income Tax Act 1967, not Schedule 7A (Reinvestment Allowance) meant for manufacturers. This decision could lead to a total tax liability of RM5.05bil for TNB for the years 2013 to 2018, with potential additional assessments for 2020 and 2021. TNB is assessing the financial impact, which may affect its earnings and net assets for 2025, and plans to pursue Investment Allowance claims under Schedule 7B. The ruling sets a precedent for TNB's tax obligations but is not expected to impact its operations.
