Thursday 28 Mar 2024
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This article first appeared in The Edge Financial Daily on May 15, 2019

KUALA LUMPUR: Ranhill Holdings Bhd says it is appealing against the ministry of finance’s (MoF) rejection of its request for an extension of the tax relief period for its subsidiary, Ranhill Powertron II Sdn Bhd (RP2).

The ministry has decided not to approve RP2’s application to extend the seven-year tax relief period to 14 years, Ranhill said in a stock exchange filing yesterday.

Ranhill had previously accounted for the tax relief as unutilised tax allowance up to the end of the concession period in 2032, based on the power purchase agreement for its plant in Rugading, Sabah.

This was in accordance with the advice of its solicitors, who had advised that the tax allowance under the agreement could still be relied on despite the introduction of the new Finance Act 2018, which came into effect on Dec 26 last year, the group said in its financial statements on May 2.

The new Finance Act had introduced a seven-year limitation on the carrying forward of unabsorbed business losses, unutilised reinvestment and investment allowances.

“Such (a) ruling implied that RP2 can only utilise its unutilised investment allowance against any taxable profit up to year 2026, requiring a potential reversal of deferred tax asset to the income statement of RM57.7 million,” Ranhill had said in its notes accompanying its financial statements earlier this month.

Shares in Ranhill climbed two sen or 1.77% to RM1.15 yesterday, giving the group a market value of RM1.23 billion.

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