EXCEL FORCE MSC BERHAD Annual Report 2017

94 23. Taxation (cont’d) The salient terms of the Pioneer Status are as follows: (i) 100% tax exemption on business income; (ii) unabsorbed pioneer capital allowances can be carried forward to the post pioneer period and deducted against the post-pioneer income of a business relating to the same promoted activity or promoted product; and (iii) unabsorbed pioneer losses can be carried forward to the post pioneer period and deducted against the post- pioneer income of a business relating to the same promoted activity or promoted product. Malaysian income tax is calculated at the statutory tax rate of 24% (2016: 24%) of the estimated assessable profits for the financial year. A reconciliation of income tax expense applicable to profit before tax at the statutory income tax rate to income tax expense at the effective income tax rate of the Group and of the Company are as follows: Group Company 2017 2016 2017 2016 RM RM RM RM Profit before tax 8,112,518 6,974,507 8,012,691 7,426,187 At Malaysian statutory tax rate of 24% (2016: 24%) 1,947,004 1,673,882 1,923,046 1,782,285 Expenses not deductible for tax purposes 690,185 785,444 599,673 547,789 Income not subject to tax (781,430) (730,746) (781,430) (725,418) Deferred tax assets not recognised (114,470) (37,391) - - Tax exempt income under pioneer status - (86,533) - - Under/(Over) provision in respect of prior years - income tax 65,350 (66,537) 64,909 (72,102) - deferred tax (17,379) 42,553 (17,379) 42,553 Tax expense for the financial year 1,789,260 1,580,672 1,788,819 1,575,107 The Group have the following unused tax losses available for carry forward, to off-set against future taxable profits. The said amounts are subject to approval by the tax authorities. Group 2017 2016 RM RM Unused tax losses 2,512,656 3,007,744 Notes To The Financial Statements 31 December 2017 (cont’d)