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Zimplats faces huge tax bill

Sep 25 2012 15:16 *Malcom Sharara

Company Data

IMPALA PLATINUM HOLDINGS LIMITED [JSE:IMP]

Last traded 0
Change 0,92
% Change 0
Cumulative volume 888096
Market cap 44.71bn

Last Updated: 17-12-2014 at 04:31. Prices are delayed by 15 minutes. Source: McGregor BFA

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Harare - Zimplats, owned by Impala Platinum Holdings [JSE:IMP], has said the Zimbabwe Revenue Authority (Zimra) is in the process of issuing revised income tax assessments covering the tax years from 2007 to 2012.
 
In a statement seen by Fin24, the group said that the principal tax per the assessments amounts to $33.8m and the company may be liable for additional interest and penalties.

This means Zimplats is facing a potential liability from government amounting to the assessed figure, and most probably higher if interest and penalties are factored in.
 
The revised assessments will disallow, in the main, the claiming of capital expenditure in full in the year incurred as provided for in the written undertakings issued by government in 2001, and on which the company has since placed reliance.
 
The group also said that to date, Zimra has assessed the company based on these undertakings, designed to put Zimplats in the same position as other mining companies in Zimbabwe which are not subject to a special mining lease.
 
Zimra has now stated that the reassessments will be issued on the grounds that the legislation required to give legal effect to the undertakings has not been promulgated.
 
The company has conceded that as the government did not give legal effect to the written undertakings as envisaged, it is liable to pay the principal amount of tax.
 
However, it has lodged an objection to the payment of penalties and interest.

Discussions with Zimra in this regard are ongoing, including discussions on payment terms. The statement does not say how much in penalties and interest Zimplats has been charged with. 

- Fin24

*Malcom Sharara is Fin24's correspondent in Zimbabwe.

*Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.
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