By SHAZNI ONG / Pic By RAZAK GHAZALI
TENAGA Nasional Bhd (TNB) rose as much as 1.2% yesterday after the electric utility giant was granted an interim stay of its RM4 billion tax bill by the Inland Revenue Board (IRB) yesterday.
In a statement to Bursa Malaysia, TNB said the notices were for the years of assessment for 2015, 2016 and 2017.
“The High Court today (Dec 12) has granted an interim stay of all further proceedings including the enforcement of the notices until the hearing of the leave application on April 2, 2020,” it said yesterday.
Shares of TNB ended the day 0.5% or six sen higher at RM13.14, valuing the company at RM74.73 billion.
Earlier this month, the group lost RM3.64 billion in market capitalisation over two trading days after it announced it had been slapped with a tax bill of close to RM4 billion by the IRB.
TNB is said to owe RM1.43 billion for 2015, RM1.24 billion for 2016 and RM1.3 billion for 2017, bringing the total owed to the tax authority to RM3.98 billion.
The group then said it has “good basis” to contend that there’s no legal and factual basis for the IRB to issue the notices, based on legal advice from its tax solicitors.
It added that it had begun legal proceedings to challenge the notices for the years of assessment 2015 to 2017 raised.
However, this is not the first time the nation’s leading power company was served such notices by the IRB.
On Nov 23, 2015, the company received additional assessment notices for 2013 and 2014, for a sum of RM985.57 million and RM1.08 billion respectively by the tax authority.
When TNB announced that it received the RM2.07 billion tax bill by the IRB on Nov 27, 2015, the company’s share price lost 24 sen or 1.8% during the next trading day.
TNB said the IRB had approved, in principle, the company’s reinvestment allowance claim for the assessment years in question.
The IRB, however, had subsequently reversed the approval on the basis that the company is not in the business of manufacturing that allowed such exemptions.
A year later in December, TNB and IRB agreed not to commence any proceedings against the assessments totalling RM2.07 billion until the matter is determined by the special commissioners of income tax and the High Court on a subsequent appeal.
Shares of TNB declined 2.7% in the past 52 weeks, while the benchmark FTSE Bursa Malaysia KLCI lost 5.8%.
Analysts surveyed by Bloomberg have a consensus one-year target price of RM15.13 on the company, for a potential return of 15%. The target has been raised by 1.2% in the past three months.