Taurai Mangudhla
ZIMBABWE Platinum Mines (Zimplats) management has vowed to take legal action against the Zimbabwe Revenue Authority (Zimra) if it insists on a further US$26, 9 million increase on Additional Profit Tax (APT) liability.
In a move described by Zimplats as “incorrect interpretation” of provisions of the 22nd and 23rd Schedules of the Income Tax Act, Zimra’s audit section reviewed the APT assessment and concluded that the deduction of income tax assessed losses in the derivation of net cash receipts, on which APT is chargeable.
The effect was that Zimplats would have to pay US$50,4 which is a further US$26,9 million from the US$23,5 million for the period 2001 – 2007, which the company had already paid for in full.
Zimplats CEO, Alex Mhembere, said his company would fight to the end against the proposed move by Zimra.
“Shareholders are aware of the long drawn dispute between Zimplats and government on whether or not Zimplats was liable for APT in view of the written undertakings given by Government in 2001 that the company would be exempted from the tax,” he said.
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“Management and the company’s tax advisers strongly believe that Zimra’s interpretation of the deduction provisions of the 22nd and 23rd Schedules of the Income Tax Act is incorrect and accordingly, an objection to the amended assessment has been lodged,” said Mhembere.
Zimplats which is 87% own by Implats was last year accused of owing government US$260 million in taxes and penalties by Washington based, Alex Stewart International.
Alex Stewart International was contracted by the Reserve Bank of Zimbabwe in 2006 to conduct an audit of the country’s mining sector. The company has representatives across the world in the field of operational auditing of mining concerns and hydrocarbon producers, the certification of mineral imports/exports, the inspection and analysis of foodstuffs, the control of medicines and pharmaceutical products, customs revenue optimisation services, and procurement auditing.
In a letter to the country’s Finance minister Tendai Biti, Alex Stewart International president and CEO, Enrique Segura wrote: “During the time that we provided services to the government of Zimbabwe we achieved the following excellent results… we were able to identify and report to the Reserve Bank on taxes and penalties due by Zimplats to the government, on the final, reviewed amount (exchange of correspondence) of US$260 million.”
