This will potentially be another blow for the power utility company which had been issued notices of additional assessment for 2013 to 2021 amounting to RM5.89 billion.
“If TNB’s FY2023-2024 capex provides any indication, we think the additional tax assessment for 2023-2024 could be around RM2 billion, raising the total amount for 2013-2024 to nearly RM8 billion,” it said in a note today.
In a worst-case scenario where it has to pay the full amount, CIMB forecasted the impact to TNB’s current target price of RM15.75 could result in an 8% to 9% decline.
The stock fell 24 sen or 1.76% to RM13.36 today, valuing the group at RM77.88 billion. So far this year, the shares have fallen 9.5%.
The research house has maintained its “buy” call on TNB, stating it is “reasonably valued and offers steady dividend returns” over the next few years.
A taxing month
For TNB, it has been a month to forget as far as tax matters are concerned. Last Thursday, it was slapped with a tax bill amounting to RM840.1 million for the year of assessment 2022.
This comes on the heels of the Federal Court ruling against TNB on July 2 in its RM1.25 billion tax assessment dispute with LHDN, for YA 2018.
With the apex court ruling it is not eligible to claim reinvestment allowance, TNB is now facing a multibillion-ringgit tax bill.
The two parties have been in dispute since 2015 over tax assessments, with RM5.05 billion worth of disputed sum still outstanding, according to TNB’s 2024 annual report.
In a bourse filing last Friday, TNB said it is evaluating legal options available to address the latest tax bill.
The company said it has made a new application for investment allowance under Schedule 7B of the Income Tax Act 1967 on July 25. If it succeeds, the impact could be reduced or even eliminated.
TNB has said it is in the midst of assessing the full financial implications of the Federal Court’s ruling.
The utility giant also assured Malaysians its focus remains on its core mission and long-term priorities, with prudent financial management and consistent cash flow underpinning its operations.