NOTES TO THE FINANCIAL STATEMENTS Cont’d 24. Tax expense cont’d Reconciliation of tax expense Group Company 2022 2021 2022 2021 RM’000 RM’000 RM’000 RM’000 Profit for the year 1,766,541 1,295,164 501,028 55,377 Total income tax expense 197,608 161,773 26,086 (16,181) Profit excluding tax 1,964,149 1,456,937 527,114 39,196 Income tax calculated using Malaysian tax rate of 24% (2021: 24%) 471,396 349,665 126,507 9,407 Effect of income subject to prosperity tax 11,114 - - - Effect of tax rates in foreign jurisdictions 431 3,340 - - Non-deductible expenses 59,540 48,692 30,104 30,007 Non-taxable income (43,619) (20,436) (130,979) (55,631) Tax incentives (335,924) (295,195) - - Movement of unrecognised deferred tax assets 29,789 47,780 - - Under provision in prior years 4,881 27,927 454 36 197,608 161,773 26,086 (16,181) Non-taxable income The non-taxable income of the Company for the financial year ended 31 December 2022 mainly relate to dividend income from subsidiaries and an associate (2021: dividend income from subsidiaries and an associate, gain on disposal of subsidiaries and unrealised derivative gain). Tax incentives As disclosed in Note 11, PMBTU was awarded Pioneer Status by the MIDA, which entitled PMBTU exemption from tax for a period of 15 years from 1 January 2013 to 31 December 2027 on 100% of statutory income derived from the production of aluminium products. Under provision in prior years - Additional assessments with penalties issued by Director General of Inland Revenue On 25 November 2021, Press Metal Bintulu Sdn. Bhd., an 80%-owned subsidiary of the Company was served with notices of additional assessments with penalties by the Director General of Inland Revenue (“DGIR”) for years of assessment 2014 to 2019. The additional assessments and penalties imposed amounted to approximately RM106,000,000. The said notices of additional assessments were raised by the DGIR among others, based on its view that certain income does not fall under pioneer status exemption approved by MIDA. Subsequent to the issuance of said notices of additional assessments, Inland Revenue Board had further extended the years of assessment under review to 2020. On 21 April 2022, the Group and the DGIR have mutually reached an out of court settlement to settle the additional assessments and penalties for years of assessment 2014 to 2020 at RM26,738,000, and this amount was recorded in the profit or loss for the financial year ended 31 December 2021. ANNUAL REPORT 2022 272
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