GHL System Berhad Annual Report 2019

G H L S Y S T E M S B E R H A D 1 9 9 4 0 1 0 0 7 3 6 1 ( 2 9 3 0 4 0 - D ) 100 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2019 CONT’D 9. TAXATION Group Company 2019 2018 2019 2018 RM RM RM RM Current tax expense based on profit for the financial year: Malaysia income tax 9,438,109 5,119,693 13,898 334,299 Foreign income tax 3,052,847 2,346,296 - - Under/(Over)-provision in prior years 977,421 139,671 (315,231) (72,671) 13,468,377 7,605,660 (301,333) 261,628 Deferred tax (Note 18): Relating to origination and reversal of temporary differences (1,130,891) (294,969) (13,033) (98,000) Under-provision in prior years 353,498 1,597,339 103,311 16,759 (777,393) 1,302,370 90,278 (81,241) Tax expense for the financial year 12,690,984 8,908,030 (211,055) 180,387 (a) The Malaysian income tax is calculated at the statutory tax rate of 24% (2018: 24%) of the estimated taxable profits for the fiscal year. (b) Taxation for other taxation authorities are calculated at the rates prevailing in those respective jurisdictions. (c) The numerical reconciliation between the tax expense and the product of accounting profit multiplied by the applicable tax rates of the Group and of the Company are as follows: Group Company 2019 2018 2019 2018 RM RM RM RM Profit before tax 39,709,587 33,491,693 18,397,591 12,093,291 Tax at Malaysian statutory tax rate of 24% (2018: 24%) 9,530,301 8,038,006 4,415,422 2,902,390 Tax effects in respect of: Non-allowable expenses 3,063,084 5,559,489 2,461,080 5,871,718 Non-taxable income (4,072,398) (8,442,187) (7,841,422) (8,537,809) Higher tax rates in foreign jurisdiction 368,044 - - - Deferred tax assets not recognised (Note 18(c)) 2,471,034 2,015,712 965,785 - 11,360,065 7,171,020 865 236,299 Under/(Over)-provision of income tax expense in prior years 977,421 139,671 (315,231) (72,671) Under-provision of deferred tax in prior years 353,498 1,597,339 103,311 16,759 Tax expense for the financial year 12,690,984 8,908,030 (211,055) 180,387