TNB Shares Slip At Mid-morning After RM840.1 Mln IRB Tax Notice

KUALA LUMPUR, July 28 (Bernama) -- Tenaga Nasional Bhd’s (TNB) shares slip at mid-morning trading after receiving a notice seeking an additional RM840.1 million in assessment for 2022 from the Inland Revenue Board (IRB).

At 10.51 am, the counter fell 18 sen to RM13.42 with a total of 2.91 million shares traded.

In a note today, CIMB Securities Bhd said the issue was due to the cumulative amount from notices seeking additional assessment for the years 2013–2021 of RM5.05 billion, net of remission of penalties and RM1.76 billion paid to IRB in December 2020, for 2016-2017, bringing the total to RM5.89 billion to date.

“We believe there is a risk that the IRB may also potentially issue a notice of additional assessment for 2023–2024.

“If TNB’s 2023-2024 financial year capital expenditure provides any indication, we think the additional tax assessment for 2023–2024 could be around RM2 billion, which raises the total amount for 2013–2024 to nearly RM8 billion,” it said.

The investment bank also said in light of the Federal Court’s decision regarding a similar notice for 2018, TNB is currently evaluating its available legal options to address the issue.

“This evaluation takes into consideration that TNB has already applied for investment allowance (IA) under Schedule 7B of the Income Tax Act 1967 (including those for 2022) to the Finance Minister,” it said.

Therefore, CIMB Securities has maintained a “Buy” call on TNB with a target price of RM15.75 per share.

On July 2, the Federal Court’s final ruling allowed the IRB’s appeal, overturning the decision by the High Court and the Court of Appeal, which had previously ruled in favour of TNB’s judicial review application to set aside the notice of additional assessment amounting to RM1.25 billion for 2018.

The Federal Court ruled that the applicable tax schedule for TNB should be 7B (IA), instead of Schedule 7A (reinvestment allowance).

-- BERNAMA