Lynas Corporation (ASX: LYC) believes that the tax break which the company has been granted for the period of 12-years needs to review in regards to the earth refinery. For that matter, the top management of the company has published the letter to Mahathir Mohamad. The tax holiday was given by the previous Malaysian government because of the company had made an investments in the nation. However, the tax benefit needs to be renewed every 5 years and must be renewed in the coming months.
The chief executive has made an announcement that the no communication in regard to review of the refinery has been received from the Malaysian government. However, the chief executive also stated that the government over there is looking towards new sources of revenues which might lead the revision of the tax reduction. The conditions for the pioneer status have been met by the company, however, making the businesses taxed is the primary source of the income for any government. Moreover, the Malaysian government is looking for the fresh income sources.
Although, the chief executive of Lynas informed investors that there is no need to worry in case the request gets withdrawn. This is because the company has sufficient tax losses which have been accumulated in the past few years. The company has made attempts in receiving in the response from the Malaysian government regarding the review. The management of Lynas blames the government’s inexperience which is causing a delay in the process of the review.
If the need arises, Lynas Corporation could also come up with the new refinery which would be situated in other location. On October 3, 2018, Lynas Corporation ended the day at A$1.645 which reflects an increase of 0.305% (intraday). The company had the market capitalization amounting to $1.09 billion.
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