PDC ordered to pay RM49mil in additional taxes after audit, reveals Chow

 

Penang chief minister Chow Kon Yeow said the audit by the Inland Revenue Board found that profits from affordable housing projects, which were fully funded by state government grants, were not exempt from tax. (X pic)

GEORGE TOWN: 

The Penang Development Corporation (PDC) has been ordered to pay an extra RM49 million in taxes following a review by the Inland Revenue Board (LHDN).

The audit covered the years 2017 to 2020 and was carried out between August 2022 and August 2024, said chief minister Chow Kon Yeow in a written reply in the state assembly to Lim Guan Eng (PH-Air Putih).

He said the additional tax notice issued on PDC, the state development arm, highlighted three main problems.

The audit by LHDN found that profits from affordable housing projects, which were fully funded by state government grants, were not exempt from tax.

“This resulted in RM2.53 million in additional taxes,” said Chow.

“Furthermore, the inclusion of projected future costs in the sale price of industrial land was deemed non-deductible, adding RM188 million to the taxable income.”

Chow said operational grants (in the form of marketing and sales promotions) provided to Invest Penang and Penang International Halal Hub Development Sdn Bhd were also not accepted by LHDN as tax-deductible, leading to RM11 million in extra taxable income.

He also gave a breakdown of PDC’s corporate tax payments from 2007 to 2023, which totalled RM256.2 million.

He said RM28.7 million was paid in 2020, RM48.5 million in 2021, and RM70.73 million in 2022.

The amount dropped to RM34.8 million in 2023.

Lim had asked whether PDC had ever received any reprimand or tax audit queries from LHDN over the corporate tax amounts paid by the state development corporation. -  FMT