186 REDISCOVER | REBUILD | SUSTAIN Notes to the financial statements - 31 December 2015 9. Taxation (cont’d.) A reconciliation of income tax expense applicable to profit before taxation at the statutory income tax rate to income tax expense at the effective income tax rate of the Group and of the Corporation is as follows: Group Corporation 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000 Profit before taxation 2,566,857 2,410,348 778,691 1,534,864 Taxation at Malaysian statutory tax rate of 25%(2014: 25%) 641,714 602,587 194,673 383,716 Effect of different tax rates in other countries/jurisdictions (28,209) (238,976) – – Effect of reduction in tax rate on deferred tax recognised 2,093 – – – Income not subject to tax: Tax exempt shipping income (634,646) (496,950) (260,596) (179,819) Other tax exempt income (15,368) (12,722) (150,490) (438,285) Expenses not deductible for tax purposes 352,646 419,653 296,954 218,948 Effect of share of results of associates and joint ventures (146,594) (146,287) – – Utilisation of current year’s investment tax allowance (19,657) (22,199) – – Utilisation of previously unrecognised tax losses (74,931) – (74,931) – Utilisation of previously unrecognised unabsorbed capital allowances (27,970) – (27,970) – Deferred tax assets recognised on unutilised investment tax allowances (32,336) (25,565) – – Net deferred tax assets not recognised during the year 22,619 15,719 22,360 15,440 Deferred tax over provided in prior year (1,034) (2,727) – – Income tax over provided in prior year (6,577) (2,222) – – Taxation for the year 31,750 90,311 – – The Government had proposed to reduce the exemption for the shipping sector provided under Section 54A of the Income Tax Act, 1967 (“the Act”) from 100% to 70% of statutory income effective from Year of Assessment (“YA”) 2012. Subsequently in December 2015, the Government has decided to defer the implementation of the above proposal to YA2020.
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