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KUALA LUMPUR (Jan 1): Tenaga Nasional Bhd (TNB) said the Inland Revenue Board of Malaysia (IRB) had agreed to immediately remit all penalties imposed on TNB for the years of assessment (YAs) 2013 to 2018 amounting to RM2.44 billion (RM2,438,869,963.62) after both parties signed two consent orders in respect of judicial review proceedings for YAs 2015 to 2017 and YA 2018 on Tuesday (Dec 29, 2020).
In a statement to Bursa Malaysia yesterday, government-controlled utility TNB said the IRB will issue the notifications of reduced assessment within 30 days from the date of the consent orders.
"The consent order for a judicial review application in relation to YAs 2015 to 2017 was recorded before the High Court on Dec 30, 2020, and the consent order for a judicial review application in relation to YA 2018 is awaiting to be recorded before the High Court at the earliest opportunity.
"The IRB agrees to the penalty remission, notwithstanding the outcome of the court proceedings, which immediately reduces the disputed tax sum by RM2.44 billion (RM2,438,869,963.62) in favour of TNB,” TNB said.
According to TNB’s filing, TNB and the IRB on Tuesday signed the two consent orders in respect of judicial review proceedings for YAs 2015 to 2017 and YA 2018 with key terms.
TNB said the IRB had agreed to immediately withdraw its objection against the judicial review applications filed by TNB to challenge the notices of additional assessment for YAs 2015 to 2018.
"Additionally, the IRB will also immediately withdraw its appeal to the Court of Appeal against the granting of leave to commence a judicial review by the High Court on Sept 30, 2020 in favour of TNB in relation to the notice of additional assessment for YA 2018.
"The IRB agrees not to object to TNB’s stay applications pending the full and final determination of TNB’s judicial review applications. In the event the High Court rules against TNB, there is no immediate liability for TNB to pay the disputed taxes until all appeal rights have been exhausted, and TNB will pay on a without-prejudice basis a sum of RM1.76 billion (RM1,757,231,332.56) out of the remaining disputed additional taxes of RM5.42 billion (RM5,419,711,030.26) for YAs 2013 to 2018.
"However, the said sum of RM1.76 billion (RM1,757,231,332.56) shall be available to TNB if the High Court rules in favour of TNB, subject to further appeal and any order of the High Court,” TNB said.
TNB said that in summary, in light of the IRB withdrawing its objection, TNB will continue to challenge the disputed notices of additional assessment for YAs 2015 to 2018 by way of judicial review.
"TNB has obtained professional advice from its tax adviser and tax solicitors, who maintain their stance that TNB has a good case to argue that it is entitled to claim reinvestment allowances under Schedule 7A of the Income Tax Act 1967 and that the IRB has no basis in law to disallow the said claims.
"The said sum of RM1.76 billion (RM1,757,231,332.56) will be recognised as tax recoverable on the balance sheet until all legal proceedings have been exhausted,” TNB said.
On Bursa yesterday, TNB’s share price closed down 10 sen or 0.95% at RM10.42, giving it a market value of about RM59.29 billion.
TNB's number of issued shares stood at 5.69 billion units.
