Proper Tax Planning Necessary to Enhance Compliance by Adrian Lim Businesses Are Encouraged [email protected] to Have Proper Tax Planning

Proper Tax Planning Necessary to Enhance Compliance by Adrian Lim Businesses Are Encouraged Adrianlim@Theborneopost.Com to Have Proper Tax Planning

cmy

Berjaya Auto’s B2 Wednesday June 15, 2016 FY16 earnings in line with Warm welcome for Tiong with new title B10 ‘Westports not likely to lose expectations Beef up non-tourism services Microsoft dives into social with US$26 billion LinkedIn deal B11 biggest customer’ export, says trade minister China faces growing vulnerabilities, fewer buffers B12 B3 B4 Proper tax planning necessary to enhance compliance By Adrian Lim Businesses are encouraged [email protected] to have proper tax planning. KUCHING: Deloitte Tax Services This will be good for cash Sdn Bhd (Deloitte) emphasised on Since the past four months, the utilisation rates for 361-400 IC jackup rigs in Southeast the importance of having proper flow management. Asia have only improved marginally, currently at 59 per cent. tax planning for businesses espe- Chow Kuo Seng, Deloitte Executive director cially with updates to Malaysia’s tax regime from time to time. Executive director Chow Kuo Persisting stress on O&G rig Seng encourages businesses to quantum as carrying on business perform tax planning as it will and compel GST registration on enable them to have good cash flow those individuals to collect tax. utilisation and day rates management especially during the “The department has caught some current era of Goods and Services Chow Kuo Seng Tan Eng Yew individuals off guard and many of By Jonathan Wong cent and day charter rates (DCR) Tax (GST). those could be one off disposal of [email protected] were hovering below US$80,000 to “Businesses are encouraged property, either purchased long US$90,000 per day for 361-400 IC to have proper tax planning. to furnish adequate information to from time to time, taxpayers are time ago or inherited and was KUCHING: Marketed utilisation jack-up rigs. This will be good for cash flow the authorities. required to comply with the latest sold off without any business rate for overall rigs within South- “Furthermore, rig utilisation management. He also shared that the rules. intention,” he said. east Asia as at end-May 2016 is still rates globally and in Asia Pacific “We also encourage businesses government through the He urged businesses to keep “Property owners should consult weak at 46 per cent, representing at that time were approximately to perform voluntary disclosure or Inland Revenue Board (IRB) themselves abreast with the latest their tax agents with regards further decline of four per cent 68 per cent and 56 per cent provide the required information has introduced a tax amnesty development in the Malaysian to GST on the disposal of their from end-January 2016. respectively,” said the research to the authority with regards to programme between compliance taxation rules and keep track of properties.” arm of MIDF Amanah Investment tax filing,” he told The Borneo Post and non-compliance to taxpayers. the changes. Additionally, Deloitte’s Bank Bhd (MIDF Research). during an interview at a hotel here The programme aims to reduce Meanwhile, Chow also called executive director for GST, See also Page B2 Since the past four months, yesterday. the rate of penalty payment in on property owners, especially Customs and Global Trade, Tan Eng the utilisation rates for 361-400 During a sharing session with the event that some businesses individuals, to equip themselves Yew highlighted that businesses IC jackup rigs in Southeast Asia clients, Chow said that having are in non-compliance of certain with the knowledge of GST. should carry out proactive review “As per our report four months have only improved marginally, voluntary disclosure will help regulations. The Customs Department for their GST submissions. ago, the utilisation rate for overall currently at 59 per cent. businesses to mitigate penalties, Chow pointed out that with viewed individuals who sell off rigs within Southeast Asia as at for instance, in the event of failing changes to the taxation rules commercial properties of a certain Turn to Page B4, Col 4 end-January 2016 was at 50 per Turn to Page B2, Col 3 ‘HSL to be more selective for Launch of new Proton Perdana a new jobs on large orderbook’ KUCHING: Local player Hock System that has a value of RM750 turning point for national carmaker Seng Lee Bhd (HSL) will likely million via its consortium of be more selective on tendering Kumpulan Nishimatsu Hock for new jobs with key focus being Seng Lee in which it holds a PUTRAJAYA: The launch of the the government’s determination to point for Proton, and benefit the the right research as well as on infrastructure and reclama- 75 per cent stake. This job is new model of the Proton Perdana, help Proton regain its glory days national economy and people. development ability, and the tion works that command higher expected to be completed by an executive sedan by Proton Hold- and put it on track to generating “I am sure the company will production scale required to margins. 2022. ings Bhd (Proton), could prove to more profit which will benefit the continue to innovate and improve, remain competitive. According to Public Investment “As for billings, we understand be a turning point for the national country. to produce the best cars for “At times, there was a sense Bank Bhd (PublicInvest that only 10 per cent of the Pan carmaker, said Prime Minister He added Proton could also Malaysians and customers of hubris, that Proton could do Research) who met with Borneo Highway contract will Datuk Seri Najib Tun Razak. prove it was a serious player in abroad,” he said at the launch anything as the government would management recently, after be recognised in FY16 while the the automotive industry, and of the fourth generation Proton always back it. securing two major projects Kuching Centralised Wastewater continue to have a major role in Perdana yesterday. Two factories were built (Tanjong worth circa RM1.8 billion System is expected to be circa See also Page B3 the development of local talent, Najib, who is also the Finance Malim and Shah Alam), capable of recently, HSL’s outstanding five per cent completed. vendors and entrepreneurs. Minister, however noted that producing 400,000 units annually. orderbook has now ballooned “With the currently healthy “I hope the launch of the new Proton was not currently in the to about RM2.4 billion. outstanding order book, we He said the launch also symbolised model Perdana will be a turning position it should be, in lacking Turn to Page B2, Col 6 “Also, we understand that it believe earnings visibility for might bid for more sub-station its construction business will jobs with its current partner, be good in the next three to Larsen and Toubro Ltd from four years. As for tender book, India. Construction earnings we understand that HSL is are expected to be intact with eyeing few sub-station jobs with the recent job replenishments,” its current partner Larsen & it said in a report yesterday. Toubro, and could also bid for “The successive job wins in other Pan Borneo subcontract the first quarter of 2016 saw the packages.” group’s outstanding orderbook Meanwhile, looking at the quadruple to RM2.4 billionn from group’s property projects, HSL RM600 million a quarter ago is looking to unveil Phase -- incidentally also the Group’s 2 of La Promenade by end- highest order book ever.” 2016 following phase 1 being To recap, the biggest job completely sold out. win for HSL is the Pan Borneo “La Promenade is the group’s Highway package which has a gated and guarded development, contract sum of RM1.7 billionn located circa seven kilometres with contract period until late- from the Kuching city centre. 2020. HSL has 70 per cent stake Developable land size is circa with the remainder owned by a 200 acres with gross development private company, Dhaya Maju value (GDV) in excess of RM1 Infrastructure (Asia) Sdn Bhd. billion,” PublicInvest Research “The package involves sections said. on low-lying land, hence will “We understand the GDV for leverage on the group’s expertise phase 2 is circa RM100 million in marine engineering,” the and would be sold on ‘build- research house added. “Margins then-sell’ basis. Hence, this could are believed to be higher as boost 1QFY17 earnings if the compared to other packages on sales are better than expected account of this.” as most of the earnings can be The other main job win is the recognised upon signing of sales Najib (right) launching the new model of Proton Perdana yesterday. Also present are (from left) Proton Holdings Bhd chairman Datuk Seri Syed Faizal Albar Syed Ali Rethza Albar, Kuching Centralised Wastewater and purchase agreement.” Minister of International Trade and Industry, Datuk Seri Mustapha Mohamed, Proton CEO, Datuk Ahmad Fuaad Mohd Kenali, Second Minister of International Trade and Industry, Datuk Seri Ong Ka Chuan, Treasury Secretary General Tan Sri Dr Mohd Irwan Serigar Abdullah and Proton deputy CEO Datuk Md Radzaif Mohamed. — Bernama photo B4 Wednesday, June 15, 2016 BUSINESS Berjaya Auto’s FY16 earnings Bursa Malaysia remains jittery, in line with expectations CI down 0.23 pct at close

KUCHING: Berjaya Auto Bhd’s KUALA LUMPUR: Shares on and RM2.67 respectively while (Berjaya Auto) fi nancial year 2016 Bursa Malaysia remained jittery Vivocom slipped 1.5 sen to 25.5 (FY16) earnings were well within amid weaker regional market sen and SapuraKencana was fi ve expectations while also coming in ahead of the US Federal Reserve sen lower at RM1.50. above the expectations of other policy meeting, with sentiment The FBM Emas Index went analysts. continuously being hampered by down 17 points to 11,398.14, the Berjaya Auto noted in a fi ling United Kingdom’s possible exit FBMT 100 Index fell 15.40 points on Bursa Malaysia that for the from the European Union. to 11,095.81 and the FBM Emas fi nancial year ended April 30, At 5 pm, the benchmark FTSE Shariah Index was down 5.60 2016, the group registered a pre- Bursa Malaysia KLCI (FBM points to 11,965.94. tax profi t of RM278.7 million, as KLCI) eased 3.66 points or 0.23 per The FBM 70 rose 16.04 points compared to the previous year cent to 1,626.11, after fl uctuating to 12,975.01 but the FBM Ace was which reported a pre-tax profi t of between 1,619.48 and 1,629.69 85.49 points lower at 5,350.95. RM299 million. throughout the day. The Finance Index declined According to the research arm In a note yesterday, Kenanga 59.69 points to 14,042.40, the of MIDF Amanah Investment Research said the key index was Plantation Index decreased Bank Bhd (MIDF Research), expected to trade with a downside 12.12 points to 7,546.65 and the Berjaya Auto reported net profi t bias within 1,620-1,650 this week, Industrial Index decreased 4.26 of RM52 million for the group’s with resistance capped at 1,640 points at 3,065.80. fourth quarter of 2016 (4Q16), and 1,650 and support thresholds Main Market turnover which brought FY16 core earnings seen at 1,620 and 1,610. increased to 891.74 million to RM202 million. On the broader market, losers shares worth RM1.50 billion This was well in line with trounced gainers 486 to 278 from 883.20 million shares worth expectations at 102 per cent of with 367 counters unchanged, RM1.12 billion on Monday. MIDF Research’s FY16F and 572 untraded and 15 others The ACE Market volume consensus. suspended. fell to 308.64 million shares On the other hand, Berjaya Volume was slightly lower worth RM80.02 million from Auto’s FY16 results beat the at 1.47 billion units worth yesterday’s 391.81 million shares research arm of Kenanga RM1.62 billion from Monday’s worth RM65.35 million. Investment Bank Bhd’s (Kenanga Berjaya Auto noted in a fi ling on Bursa Malaysia that for the fi nancial year ended April 30, 2016, the group registered a pre-tax profi t of 1.48 billion units worth RM1.21 Warrants increased to 266.79 Research) estimate but was RM278.7 million, as compared to the previous year which reported a pre-tax profi t of RM299 million. billion. million shares worth RM34.04 within consensus estimate, as Regionally, Japan’s Nikkei 225 million from 208.03 million the group reported a 12 months shed 1.0 per cent to 15,859.0, Hong shares worth RM28.85 million of 2016 (12M16) profi t after tax and The positive deviation was mainly due to stronger earnings recovery in margins from a better Kong’s Hang Seng slid 0.61 per previously. minority interest (PATAMI) of model mix, i.e. sales resumption cent to 20,387.53 and Singapore’s Consumer products accounted RM198 million, making up 107 per derived from strong sales driven by the better-than-expected of the higher margin CX5 and Straits Times eased 0.53 per cent for 56.94 million shares traded cent/101 per cent of its/consensus reception of Mazda fl agship models namely Mazda2, Maz- absence of run-out incentives to to 2,770.78. on the Main Market, industrial estimate. dealers. Back home, Maybank led the products (233.27 million), “The positive deviation was da3 and CX-5 in both domestic and Philippines markets. “The CX5, in particular the 2WD losses in heavyweights with its construction (53.82 million), mainly due to stronger earnings variant, currently entail some shares declining 16 sen to RM8, trade and services (333.45 derived from strong sales driven Kenanga Research two months waiting list. The CX5 IOI Corp slipped four sen to million), technology (50.40 by the better-than-expected is Mazda’s largest contributor RM4.29, MISC and Genting both million), infrastructure (6.72 reception of Mazda flagship accounting for 30 per cent-40 lost 12 sen to RM7.48 and RM8.04 million), SPAC (9.25 million), models namely Mazda2, Mazda3 total 16.9sen per share dividend As MIDF Research had argued per cent of Mazda total industry respectively while CIMB shed fi nance (49.36 million), hotels and CX-5 in both domestic and for FY16 implies some 7.4 per in its previous quarter results volume (TIV),” the research arm four sen to RM4.36. (696,100), properties (51.51 Philippines markets,” Kenanga cent yield. note, the bulk of the old CX5 run- said. A m o n g a c t i v e s , L K L million), plantations (36.60 Research said. The research arm further noted out was done in 3Q16. On another note, MIDF Research International gained two sen to million), mining (4,000), REITs Kenanga Research noted that that given Berjaya Auto’s strong The research arm noted that highlighted that at current 31 sen, China Automobile and (9.71 million) and closed/fund a surprise special dividend of free cash flow equity (FCFE) run-outs typically involve a lot level of Japanese yen/ringgit, AirAsia were fl at at four sen (13,000). 7.5 sen was declared together yield, this level of dividend looks of dealer incentives to clear off management does not see much with an interim dividend of 2.5 sustainable, barring merger and inventories of the old model which reason to lock in rates and as sen, bringing year to date (YTD) acquisition (M&A) plans going impacts margins quite a lot. such, Berjaya Auto will face cost RINGGIT dividend payment to 16.9 sen. forward (which can still be funded It further noted that on the pressures going forward from a This aced the research arm’s by Berjaya Auto’s RM372 million bright side the pain had been stronger Japanese yen. THE ringgit retreated from quoted at 4.1030/1070 against anticipated dividend of nine sen net cash). taken and the absence of this The research arm saw its earlier gains to close lower the US dollar from Monday’s due to the unexpected special It said that plant capital meant 4Q16 will show meaningful possibilities of earnings revisions against the US dollar yesterday 4.0890/0940. dividend pay-out which resulted expenditure (capex) (which is margin recovery sequentially, as in the near-term, but noted on a weaker buying interest “It is hope that the meeting in a pay-out ratio of 98 per cent. where the bulk of capex is for can be seen from the results. that it has also yet to factor in ahead of the US Federal Open will help lift the demand for “Excluding the special dividend, an auto company) is undertaken “There was also a fair bit of potential contribution of the Market Committee (FOMC) meet- emerging currencies, including net dividend paid would have met by 30 per cent-owned Mazda (dealer) incentive for the Mazda CX3 completely knocked down, ing later yesterday. the ringgit,” a dealer said. our expectations,” it said. Malaysia Sdn Bhd which is now 2, which sustained in 4Q16, but scheduled to come on-stream end- At 5pm, the local note was — Bernama MIDF Research noted that the self-funding. this was more than offset by the current year 2016. MKH’s acquisition in PTSPS could lead to Businesses need to stay vigilant on compliance further synergies derived from plantation land ◆ From Page B1 return submission are accurate,” pricing. he revealed. “This is one of the aspects where He also encouraged businesses On another note, Deloitte’s tax businesses need to take note as KUCHING: MKH Bhd’s (MKH) 75 Research Sdn Bhd (AllianceDBS mill operational effi ciency. to submit GST returns and correct manager Kane Bong observed that the authority has been active per cent acquisition in PT. Sawit Research), the plantation land, “The proposed acquisition any errors as well as improve with the implementation of GST in conducting transfer pricing Prima Sakti (PTSPS) could lead located 50 kilometres (km) north- consideration of RM15 million control and review for the GST over a year, there are increased audits. to further synergies derived from east of Samarinda and 133km implies enterprise value (EV) per submission processes. work involved for example with “They are required to furnish PTSPS’ plantation land, analysts north of Balikpapan, is adjoining ha of about RM40,000 per ha which “Businesses should take honest regards to administrative duties. proper documentation for instance, believe. and contiguous to MKH’s existing is relatively cheap as fully mature efforts in trying to comply with “Basically, there are more inter-company transactions at In a fi ling to Bursa Malaysia, oil palm plantation land of 15,942 plantation land can be valued at the rules. They also need to administrative work. One of the arm’s length to prove that they are the board of directors of MKH ha. RM60-70,000 per ha,” AllianceDBS ensure better compliance from challenges is compliance and also adhering to the rules,” he said. announced that the group’s wholly “The plantation land is also 79 Research said. now onwards (to avoid being the cost of compliance,” he said. Also present during the tax owned subsidiary company, MKH per cent planted with oil palm In terms of earnings impact, penalised). Apart from that, Deloitte’s tax seminar organised by Deloitte were Plantations Sdn Bhd (MKH trees with a weighted average age PTSPS will only contribute “(Hence), businesses need to manager Abhijit Patne pointed Deloitte’s senior manager Wong Yu Plantation) had entered into a of one year old as most of the trees meaningfully from FY19 onwards remain vigilant on GST compliance out the importance of having Sann, Deloitte’s senior tax manager sale and purchase agreement with were planted between 2013-2016,” given the young age profi le as issues and ensure that the GST proper documentation for transfer Chai Suk Phin and its clients. Ivakijaya Sdn Bhd (Ivakijaya) the research house said. AllianceDBS Research estimated to acquire 6,975 ordinary shares Given the impressive track that earnings contribution from of one million rupiah each record of MKH’s existing PTSPS is less than two per cent equivalent to 75 per cent equity plantation land with an expected for FY17-18F. interest in PTSPS from Ivakijaya fresh fruit bunch (FFB) yield of 29 Therefore, the research house Inari’s near-term outlook for a total cash consideration of per metric tonne (MT) in fi nancial maintained its earnings forecast RM15 million. year 2016 (FY16) despite its young for now. “PTSPS owns approximately age profi le of seven years old, AllianceDBS Research 2,445.49 hectares (ha) of land AllianceDBS Research believed reiterated its ‘buy’ rating for MKH encouraging, analysts say for oil palm plantation in East there could be further synergies with sum of parts (SOP)-derived Kalimantan, Indonesia,” the derived from PTSPS’ plantation target price of RM3.20 per share. group said. land. “We continue to like MKH for KUCHING: Inari Amertron Bhd’s It added that barring unforeseen The research house noted that its undemanding valuation as (Inari) near-term outlook remains circumstances, the proposed the additional FFB production well as clear earnings visibility encouraging with a likely earn- acquisition is expected to be will also ensure steady FFB anchored by its twin drivers in ings rebound set for the fourth completed in the fourth quarter contribution to MKH’s 90MT property and plantations, leading quarter of financial year 2016 of 2016. crude palm oil (CPO) mill, to a record year in FY16,” the (4QFY16) following key customer According to AllianceDBS potentially enhancing the group’s research house said. Broadcom’s upbeat guidance for the group’s wireless segment, Affi n Hwang Investment Bank Bhd says. TOP 20 GAINERS TOP 20 LOSERS Affi n Hwang Investment Bank STOCK+/- PREV BUY SELL L/DONE STOCK+/- PREV BUY SELL L/DONE Bhd (Affi n Hwang) noted that AIRPORT +0.190 6.380 6.420 6.570 6.570 BIPORT -0.380 7.000 6.700 6.980 6.620 Inari appears to be on track to register revenue growth of 20 per PETGAS +0.160 21.400 21.460 21.560 21.560 UMW -0.260 5.540 5.280 5.300 5.280 cent over the previous quarter. Approximately 50 new testers are expected to be installed as part of Phase 1 to cater to HEIM +0.160 14.740 14.900 14.960 14.900 PETRONM -0.240 4.110 3.870 3.900 3.870 It further noted that this is Broadcom’s wired division. PETDAG +0.160 23.260 23.420 23.480 23.420 SCIENTX -0.220 12.340 12.120 12.140 12.120 underpinned by a combination GOLDIS +0.150 2.500 2.480 2.650 2.650 ALLIANZ -0.200 10.300 10.100 10.280 10.100 of reasons including a low base PESTECH +0.150 6.500 6.530 6.640 6.650 MAYBANK -0.160 8.160 8.000 8.040 8.000 in 3QFY16 where revenue fell 26 further sustain in the following The research fi rm noted that per cent quarter on quarter (q-o-q) quarter as it would capture the this represented a 61 per cent PBBANK +0.140 19.040 19.120 19.180 19.180 MISC -0.120 7.600 7.470 7.480 7.480 and strong shipments by a Korean full ramp of its North American increase from the 422 units as at SAM +0.130 7.350 7.480 7.490 7.480 GENTING -0.120 8.160 8.040 8.050 8.040 customer. customer. end-June 2014. PPB +0.120 15.960 16.000 16.080 16.080 HSI-C36 -0.115 0.385 0.000 0.000 0.270 Recent management outlook “However, apart from the “Thus far, capacity has mirrored HLFG +0.120 14.460 14.480 14.600 14.580 TECGUAN -0.090 1.270 1.180 1.200 1.180 and guidance on the 2Q16 analysts’ usual strong seasonal ramp, Broadcom’s own expansion, TOMYPAK-OR +0.085 0.995 1.080 1.090 1.080 SOP -0.090 4.070 3.980 4.000 3.980 result call from Broadcom, a key the next generation phones although we understand that customer, further confi rmed the YNHPROP +0.080 1.850 1.860 1.930 1.930 KESM -0.090 5.130 5.010 5.030 5.040 are also expected to see higher the capacity still lags behind research fi rm’s view of Inari’s radio frequency (RF) content per Broadcom’s own wafer-fab BURSA +0.080 8.670 8.680 8.750 8.750 SUPERMX -0.090 2.240 2.140 2.150 2.150 improved outlook in the coming device,” Affi n Hwang said. expansion, which has effectively ASTRO +0.080 2.750 2.760 2.790 2.790 APOLLO -0.090 5.750 5.660 5.700 5.660 quarters. This was consistent with doubled over the same period. BJTOTO +0.080 2.880 2.930 2.960 2.960 LIIHEN -0.080 3.240 3.150 3.160 3.160 “According to Broadcom’s the growth that the research “Hence, while Inari is ready to EKOVEST-WB +0.075 0.570 0.645 0.650 0.645 PWROOT -0.080 2.480 2.400 2.460 2.400 president, Hock Tan, the wireless firm projected for Inari’s RF capture the growth that Broadcom CHINA50-HB +0.075 0.210 0.000 0.000 0.285 MNRB -0.080 2.740 2.650 2.710 2.660 division is expected to see mid-20 segment. is expected to experience, we per cent sequential revenue growth Affin Hwang expected the believe that Broadcom will SUPERLN +0.070 2.080 2.090 2.140 2.150 KAWAN-WA -0.080 2.380 2.300 2.340 2.300 in the upcoming quarter. number of Inari’s RF testers to still need to rely on its other MBMR +0.070 2.030 2.030 2.100 2.100 MAGNI -0.080 4.320 4.230 4.240 4.240 “He further elaborated that hit 680 units by September (from contractors to fulfi l capacity in HSI-H49 +0.065 0.705 0.000 0.000 0.770 VITROX -0.080 3.730 3.570 3.690 3.650 strong revenue growth should the present 609 units). the coming quarters.