Tnb Faces Rm5 05b Tax Bill Following Apex Court Verdict

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Tenaga Nasional Berhad is facing tax arrears of RM5.05 billion after the Federal Court ruled it is ineligible to claim reinvestment allowance (RIA), which is meant for manufacturers, according to a report by The Edge today.
The company reportedly warned that the ruling may impact its earnings and net assets this year.
Yesterday, the Federal Court allowed the Inland Revenue Board’s (IRB) appeal to reinstate a RM1.25 billion tax assessment against TNB for the 2018 assessment year. The amount was the remainder of an initial RM1.81 billion notice, which was reduced.
The court reportedly held that as a utility company, the applicable schedule is 7B of the Income Tax Act 1967, namely investment allowance, instead of 7A for RIA.
In light of the Federal Court’s decision, TNB will pursue a claim for the investment allowance under Schedule 7B.
The dispute between TNB and IRB reportedly dates back to 2015. Between 2013 and 2021, the IRB issued RM9.25 billion in additional tax assessments to TNB.
After RM2.44 billion in penalties got waived through settlements, TNB’s net potential liability was reduced to RM6.81 billion.
The utility company paid another RM1.76 billion in December 2020, leaving an estimated RM5.05 billion outstanding.
TNB continued to claim RIA for 2022 and 2023, and mentioned in the report that it would claim for 2024 too.
New rates
Meanwhile, TNB’s new electricity rates kicked off on Tuesday (July 1), with the firm touting that a majority of households in Peninsular Malaysia will have cheaper electricity bills with the new rates.
It added that bills may be lower by up to RM10.80, depending on power consumption.
However, savings will only be enjoyed by those using 1,000 kWh or less - as previously assured by the Energy Commission. - Mkini

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