More On AirAsia Deferred Tax

Back on 18th November 2006, there was this article called "Accounting for AirAsia". This editorial was written by Star Bizweek deputy editor, Mr Errol Oh. (Sorry I do not have the link for it now)

Let me highlight the last few passages.

• .... For airline, there's a lot at stake. It's entitled to a tax incentive called an investment allowance. This means for certain capital expenditure (say, an aircraft purchase), the company can deduct a larger amount than the actual cost when calculating its tax liability.
  
  As a result, AirAsia does not need to pay tax on its operations. It only pays tax on other income, such as interest, which is a relatively small amount.
  
  The company says it has committed to buying more aircraft in the several years ahead and doesn’t see itself actually paying a lot of income tax. At the same time the unutilised investment and capital allowances will accumulate over the years. It says this should be treated as a deferred tax asset, thus lowering the company's deferred tax liability....

1st December 2006, on Business Times. (sorry no links either)

• AirAsia revenue rises 29pc in Q1
  By Anna Maria Samsudin
  bt@nstp.com.my
  
  December 1 2006
  
  AIRASIA Bhd reported a RM94.52 million net profit for the first quarter ended September 30 2006, based on the International Financial Reporting Standard (IFRS).
  
  However, using Malaysian Accounting Standard Board (MASB), including FRS 112 on Income Tax, the budget airline reported a 35 per cent year-on-year decline in net profit to RM5.66 million from RM8.77 million previously.
  
  Deputy chief executive officer Datuk Kamaruddin Meranun explained the drop in net profit, under the MASB, was largely due to tax issues.
  
  "Under the MASB, we are required to include taxes in our accounting. In actual fact, we don't have to pay taxes for the next 15 years following the tax allowance given by the Government. That is why you see the drop in our numbers," he said....

Yes, as publicly stated in 2006, AirAsia do not have to pay taxes for the next 15 years!

And as highlighted in the posting AirAsia 18 Billion Tax Issue, currently AirAsia has 930.591 million in deferred taxes!

How?

Now if Maybank's report is correct and that foreigners now OWN more shares in AirAsia than Malaysians, how would you feel about this deferred tax or tax allowances then? Should AirAsia continue to enjoy the luxury of not paying taxes?