S P Setia’s tax bill shrinks, Country Heights gets refund

KUALA LUMPUR (Nov 22): S P Setia Bhd announced yesterday it had reached a settlement with the Inland Revenue Board of Malaysia (IRB) to pay RM2.61 million in additional taxes imposed on its wholly-owned subsidiary Bandar Setia Alam Sdn Bhd, instead of the RM75.4 million initially assessed.

In a filing with Bursa Malaysia yesterday, S P Setia said it had received a consent order recorded before the High Court in Shah Alam yesterday for the amount of the tax settlement.

“With the above, the tax dispute between Bandar Setia Alam and the IRB has been settled amicably,” it said. A year ago, the company revealed that the taxman had demanded RM75.38 million from Bandar Setia Alam in additional taxes relating to five years of assessments and penalties, but maintained that it had grounds to contest the notice.

S P Setia said it was served the notice as the IRB had taken the view that the gains from the disposal of land and properties held under investment properties under Bandar Setia Alam were chargeable under the Income Tax Act 1967 instead of the Real Property Gains Tax Act 1976.

Separately, Country Heights Holdings Bhd expects to receive a tax refund of RM3.8 million from the IRB.

In a filing with Bursa Malaysia yesterday, Country Heights said its unit, Mines Waterfront Business Park Sdn Bhd (MWBP), had received notices of reduced assessments for 2007 (RM14,933), 2008 (RM976,892), 2009 (RM1.16 million), 2010 (RM1.03 million) and 2011 (RM687,716).

The reduced assessments were due to adjustments made on tax deduction claims on interest expenses paid to East Vision Leisure Group Sdn Bhd and a Malayan Banking Bhd term loan submitted by MWBP via its tax agent, it said.

Country Heights said the tax refund would not have any effect on its share capital and its substantial shareholder’s shares in the group. Rather, it would “positively improve the retained earnings of the Country Heights group and that of MWBP”.

The government announced recently that individuals and businesses owed income tax and goods and services tax (GST) refunds will be paid early next year. It said 121,429 companies are seeking RM19.4 billion in outstanding GST refunds for the period between 2015 and May 2018.

Shares in Country Heights closed one sen lower at RM1.29 yesterday, with a market capitalisation of RM355.62 million. S P Setia slipped two sen or 0.94% to close at RM2.12, with a market capitalisation of RM8.389 billion.

This article first appeared in The Edge Financial Daily, on Nov 22, 2018.

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