Inland Revenue Board slaps IWCity unit with additional tax claim

KUALA LUMPUR (April 13): A unit of Iskandar Waterfront City Bhd (IWCity) is being sued by the Inland Revenue Board (IRB) for RM32.23 million in additional taxes and penalties.

In a bourse filing yesterday, IWCity said its wholly-owned subsidiary Tebrau Bay Constructions Sdn Bhd (TBCSB) had been served with a legal claim dated March 15, 2018, yesterday for the amount, as well as interests and costs.

IWCity explained that IRB’s legal claim arose from the additional income tax assessment and penalties levied by the IRB amounting to RM36.98 million for the assessment years 2010, 2012 and 2014.

“TBCSB did not receive the notices of assessment dated Aug 16, 2017, but was only notified of the said notices via email on Jan 24.”

It said TBCSB disagrees with the assessment and has appealed to the IRB seeking an extension of time. It has not paid the additional assessment pending the appeal outcome.

“Upon consulting its solicitors, TBCSB is of the view that there are reasonable grounds to challenge the claims. In this regard, at this juncture the company is not able to ascertain the financial impact arising from the claims.

“The claims, however, are not expected to have any material operational impact on the IWCity group,” it said, adding the company is seeking the advice of its tax consultants and solicitors.

IWCity’s tax woes come on the heels of a number of other listed companies visited by the tax authorities in the past two years.

More recent actions taken by the IRB include one against IDimension Consolidated Bhd for an additional RM406,019 in taxes and penalties for the years of assessment of 2013 and 2014.

In February, Eden Inc Bhd — controlled by Tan Sri Abdul Rahim Mohd — was slapped with a winding-up petition by the IRB for outstanding payments of about RM3.2 million.

S P Setia Bhd has had it worse. Earlier this year, it was hit with a RM32.54 million tax bill for the years of assessment 2009 to 2015. It was the second claim in less than four months as in November last year, the IRB had demanded additional taxes and penalties amounting to RM75.38 million for the years of assessment 2008 to 2013.

IWCity’s shares closed 5.5 sen or 6.14% lower to 84 sen, giving it a market capitalisation of RM702.57 million.

Over the past 12-months, the counter has fallen 72.28%.

This article first appeared in The Edge Financial Daily, on April 13, 2018.

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