20/04/2026

BIZ & FINANCE MONDAY | APR 20, 2026

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Be careful when waiving debts DEBT waivers are commonly used by companies, particularly within group structures, as a means of streamlining balance sheets and improving financial positions. In times of Key considerations Companies should always carefully consider several key factors,

leased liabilities. The position was subsequently revisited by the Court of Appeal in Multi-Purpose Credit Sdn Bhd v Ketua Pengarah Hasil Dalam Negeri . The Court emphasised that Section 30(4) is a comprehensive and exclusive provision governing the taxability of released liabilities and clarified that the key question is whether a prior deduction has been allowed. In the absence of such deduction, a waiver should not automatically be treated as taxable income. This decision restored a measure of certainty in determining the tax treatment of debt waivers. Nevertheless, it would be premature to conclude that all debt waivers are free from tax exposure. The differing judicial approaches highlight that each case ultimately turns on its own facts. The Inland Revenue Board (IRB) is likely to continue scrutinising such arrange-ments closely, particularly where the waiver arises in the course of business operations or forms part of a broader group restructuring exercise.

settled: where a liability had not previously been claimed as a tax deduction, and no capital allowances had been enjoyed in respect of that liability, a subsequent waiver would generally not give rise to taxable income. However, case laws surrounding this topic suggest that the issue is far from straightforward. In Multi-Purpose Sdn Bhd v Ketua Pengarah Hasil Dalam Negeri , the High Court adopted a broader approach. It held that a waiver of loans could nonetheless be taxable under Section 4(a) of the ITA as business income, even where no prior deduction had been claimed. The court focused on whether the waiver resulted in a gain connected to the taxpayer’s business. This decision raised concerns as it appeared to depart from the long standing reliance on Section 30(4), which specifically addresses re A shift in the courts’ approach

proceedings are often not pursued. As a result, the debtor could be subject to tax on the waiver, while the creditor is unable to secure a deduction. The takeaway is clear: debt waivers should not be treated as routine accounting adjustments. They are transactions with real tax consequences that require careful evaluation. Before proceeding, companies should assess the full tax impact, consider alternative restructuring options where appropriate, and ensure that the underlying com mercial rationale is properly docu mented. It would be timely for taxpayers to thoroughly review their past posi tions on this matter as the IRB can open tax audits for the past five years. This article is contributed by Thannees Tax ConsultingServices Sdn Bhd managing director SM Thanneermalai (www.thannees.com).

including the purpose and nature of the original loan, whether any tax deductions or capital allowances were previously claimed and how the waiver is treated in the financial statements. It is also important to recognise the potential asymmetry in tax treatment arising from a waiver of debt. While the debtor company may face tax exposure as a result of the waiver, the creditor does not automatically obtain a corres ponding tax deduction. Under the Act, a separate set of rules applies to the creditor, requiring it to demonstrate that the debt is wholly or partially irrecoverable and that reasonable steps have been taken to recover the amount before any deduction can be claimed. In practice, this can be chal lenging, particularly in related-party situations where formal recovery actions such as demands or legal

financial difficulty, it is not unusual for shareholders or related entities to step in and relieve a com pany of its outstanding obligations, whether to support continued operations or to facilitate restructuring efforts. While these arrange ments may appear to be straight forward commercial solutions driven by practical considerations, they are not without complexity. A waiver of debt does not merely eliminate a liability from the books, it can also give rise to accounting gains and, more importantly, tax implications. What the law says Under the Income Tax Act 1967 (ITA), the tax treatment of debt waivers is governed by Section 30(4). Histori cally, the position was relatively Life Water plans price hikes to offset higher resin costs: CIMB Securities PETALING JAYA: Life Water Bhd plans to increase average selling prices (ASP) by 60 sen per carton by May 1, and potentially by a further 40-60 sen per carton in July, implying cumulative selling price hikes of 15-20%, CIMB Securities Sdn Bhd’s channel checks showed. The research firm said these moves aim to pass through the recent 60-70% year-on-year (estimated) surge in resin costs. “As resin accounts for 20-25% of Life Water’s total costs, based on our estimates, a 70% increase in resin prices would translate into a 12-18% increase in total cost of goods sold, which can be well absorbed by the quantum of selling price hikes,“ CIMB Securities said in a report. It said Life Water has locked in resin at lower prices up to the end of first-quarter FY26 at RM850-900 per tonne against the current market price of RM1,440 per tonne. “This should help cushion near term margin pressure,“ it said. The research firm said Life Water views the current operating environment as a long-term positive. “We gather that, as resin suppliers are prioritising larger customers, smaller players are facing increased pressure from tighter raw material access and higher procurement costs. CIMB Securities said: “We have trimmed our FY27-FY28 earnings per share forecasts by 7.4-7.7% to account for higher resin prices and staggered selling price hikes. Accordingly, we lower our target price to RM1.90 from RM2.05. “We continue to like Life Water for its defensive demand profile, as bottled water remains a daily necessity in Sabah, scalable expansion, with capacity set to rise 2.1x over FY24-28, and multiple growth levers, including its new mini market client, regional expansion and FMCG (fast moving consumer goods) sauces and condiments. .”

From left: Ansa Motors general manager regional business Daryl Young, sector head Jean Marc Mouttet and Pontifex. The launch marks Proton X50’s

second export market entry.

Proton X50 makes debut in Trinidad and Tobago market PETALING JAYA: National automaker Proton Holdings Bhd has expanded the global footprint of its bestselling B-segment SUV, the Proton X50, by launching it in Trinidad and Tobago, marking the model’s second export market entry after it was launched in Brunei in January. This latest iteration further streng thens its appeal as a smart and stylish SUV for modern lifestyles,” he said. market for Proton in the Caribbean region and plays an important role in our broader export strategy. The introduction of the All-New Proton X50 there reflects our confidence in the market’s growth potential as well as the strength of our local partnership.

refined driving experience. Power comes from Proton’s i-GT 1.5-litre turbocharged engine, producing 181PS and 290Nm of torque, paired with a seven-speed dual-clutch transmission. Com bined, they offer improved res ponsiveness, fuel efficiency of just 6.1L/100 km and driving comfort for both urban and highway conditions. The updated model also features a refreshed exterior design with sharper lines and a more com manding stance, complemented by a modern, technology-focused interior. Safety remains a key pillar of the X50, and Proton continues to emphasise intelligent mobility. Advanced driver assistance systems, like a 360-degree camera and smart parking help, are supported by various safety technologies designed to enhance driver awareness and keep passengers safe.

The arrival of the All-New Proton X50 in Trinidad and Tobago reinforces the automaker’s com mitment to delivering competitive, high-quality vehicles to inter national markets while continuing to build momentum for its export business globally. One of the company’s key sales growth pillars, export sales volume was 6,000 units in 2025, its highest level since the beginning of Proton’s partnership with Geely. Commenting on the launch of Proton X50 in Trinidad and Tobago, Proton International Corporation Sdn Bhd CEO Edmund Lim Meng Thong emphasised the strategic importance of the market. “Trinidad and Tobago is a key

“Moving into 2026, Proton International Corporation is com mitted to further expanding our export footprint by introducing new models, strengthening our distri bution network, and increasing overall export volumes across multiple regions. These efforts will encompass both Proton’s ICE and EV models as we strive to bring Proton products and our brand values to more buyers globally,” he added. Building on the formidable reputation established by its predecessor, the All-New Proton X50 delivers a more engaging and

The launch, hosted by local distributor Ansa Motors underscores Proton’s growing export ambitions as it continues to strengthen its presence in international markets. Speaking at the launch, Ansa Motors general manager for new vehicle sales, Marc Pontifex, highlighted the model’s strong value proposition. “The All-New Proton X50 offers a premium driving experience at a competitive price point, making advanced automotive technology more accessible to a wider range of drivers across Trinidad and Tobago.