KENANGA ANNUAL REPORT 2017

40. TAXATION AND ZAKAT Group Bank 2017 RM'000 2016 RM'000 2017 RM'000 2016 RM'000 Current income tax: Tax expense for the financial year 17,263 12,706 17,050 11,812 (Over)/Under provision in prior financial years (55) 819 11 690 17,208 13,525 17,061 12,502 Deferred tax (Note 19): Relating to origination and reversal of temporary differences (2,099) (2,208) (1,600) (2,228) Over provision of deferred tax assets in prior financial years 1,134 683 556 982 (965) (1,525) (1,044) (1,246) Zakat 210 330 210 330 Total income tax expense 16,453 12,330 16,227 11,586 Domestic income tax is calculated at the statutory tax rate of 24% (2016: 24%) on the estimated chargeable profit for the financial year. A reconciliation of taxation applicable to profit before taxation at the statutory income tax rate to taxation at the effective tax rate of the Group and of the Bank is as follows: Group Bank 2017 RM'000 2016 RM'000 2017 RM'000 2016 RM'000 Profit before taxation and zakat 40,619 32,537 61,608 33,613 Taxation at Malaysian statutory income tax rate of 24% (2016: 24%) 9,748 7,809 14,786 8,067 Effect of income not subject to tax (2,148) (1,309) (1,709) (624) Effect of expenses not deductible for tax purposes 4,488 4,679 2,373 2,141 Loss not deductible for tax purposes 3,205 132 – – Utilisation of previously unrecognised tax loss and unabsorbed capital allowances (366) (1,569) – – Deferred tax asset not recognised on unutilised business losses – 640 – – Deferred tax asset not recognised on unabsorbed capital allowances 41 116 – – Deferred tax asset not recognised on balancing allowance 196 – – – Over provision of deferred tax assets in prior financial years 1,134 683 556 982 (Over)/Under provision of income tax expense in prior financial years (55) 819 11 690 Tax expense for the financial year 16,243 12,000 16,017 11,256 Zakat 210 330 210 330 Tax expense and zakat for the financial year 16,453 12,330 16,227 11,586 Kenanga Investment Bank Berhad 31 December 2017 162 notes to the financial statements