|Description||JHM CONSOLIDATION BERHAD (“JHM” or “the Company”) – Acceptance of the proposal issued by Inland Revenue Board of Malaysia|
JHM wishes to announce that its wholly-owned subsidiary, Morrissey Assembly Solution Sdn Bhd (“MASSB”) has on 22 November 2022 accepted the proposal issued by Inland Revenue Board of Malaysia (“LHDNM”) for the additional assessment of RM4,892,767.68 (“Additional Assessment”) with penalty of RM733,915.16 (“Penalty”) for the year of assessment 2018 and 2019 (“YA 2018 and 2019”).
The Additional Assessment was raised mainly pursuant to the changes in the Paragraph 3(3)(a) of P.U. (A) 161/2019 (“Paragraph 3(3)(a)”) (“PU Order”) for the significant increase in export allowance incentive (“Incentive”). Paragraph 3(3)(a) states that at least 60% of the issued share capital of the qualifying company is to be owned directly by Malaysian citizen. Based on foregoing, a company which is indirectly owned by Malaysian citizens (at least 60% of the shares through another company) would not qualify for the Incentive.
Chartered Tax Institute Of Malaysia (“CTIM”) has sought confirmation and clarification on the said Paragraph 3(3)(a) via its letter dated 28 November 2019 with LHDNM, and LHDNM only confirmed the clarification on the direct shareholding by an individual via its letter dated 4 June 2020 and that the said PU Order has come into effect from 7 June 2019. Any tax computations filed after the said date would not be eligible for Incentive.
We have highlighted our grievances to CTIM who will initiate discussions with the Minister Of Finance (“MOF”) and LHDNM to reconsider reinstating the indirect shareholding into the said PU Order for the purpose of qualifying for Incentive as the current PU Order has not met the objective of encouraging an exporter to export goods. We shall be able to claim back the Incentive for YA 2018 and 2019 should a revised PU Order to include indirect shareholding as we reserve our right to claim the said Incentive.
MASSB has been claiming the said Incentive since Year of Assessment (YA) 2016 until YA 2019 and Reinvestment Allowance was claimed in the subsequent years of assessment.
MASSB has on the same day submitted an appeal with LHDNM to request for waiver on the Penalty.
The Additional Assessment and the Penalty will be reflected in Fourth Quarter of the Company’s financial result for year 2022.
This announcement is dated 22 November 2022.