Highway companies want cash for toll holidays, not tax rebates

 

The highway concessionaires say the government should pay them cash as their money flow will be affected otherwise.

PETALING JAYA: The 18 companies managing Malaysia’s 33 highway concessions are to seek government compensation in cash and not in the form of tax rebates for nine days gazetted as toll-free days each year.

The government is believed to have met representatives of the concessionaires to discuss the compensation mechanism, with no decision being made so far.

The nine toll-free days are two days each for Hari Raya, Chinese New Year, Deepavali and Christmas, and one day for National Day. The companies have been informed verbally that the toll holidays have been gazetted.

According to an industry source, the concession companies were upset that the government had not consulted them first to work out the compensation mechanism before implementing the toll-free days.

Under the current practice, the government pays back 100% of the tolls that are waived during the period, However, the source said it has been slow in settling the dues which affects the cash flow of the firms.

“Right now, even the compensations for the toll holidays during the general election last November, Chinese New Year in February and Hari Raya in April have not been settled yet,” the source told FMT.

The government had announced recently that it would cost RM37 million for the two toll free days during Deepavali a week ago.

Another source said in order for the companies to recover the toll collection losses for the nine days, the company, among others, may consider restructuring options by extensions of concession periods or via tax exemption.

“Unfortunately for some of us, we start paying taxes much later, between 10 to 15 years later. We can’t wait that long,” he said.

In a letter from the Association of Highway Concessionaires Malaysia earlier this year to the works ministry, it said the representatives of all highway companies met to discuss the compensation mechanism.

The association said it was then decided unanimously that the government should pay the concessionaires in cash as their money flow will be affected otherwise.

“Our proposal must be considered as toll exemption on the nine days will have a major impact on the cash flow of the companies involved. Compensation by cash will help the firms a great deal as they have financial obligations to financial institutions,” the letter read. - FMT