Zimplats unit hit with $34m tax charge
26 September 2012
Posted by: SAIT Technical
By Reuters/Business Report
Zimbabwe has ordered Impala Platinum's Zimplats unit to pay $33.8 million in back taxes, arguing a tax holiday claimed by the firm had no legal basis, Zimplats said on Tuesday.
Zimplats, the country's largest mining operation, said in a statement the Zimbabwe Revenue Authority (ZIMRA) had re-assessed its tax obligations for the period between 2007 and 2012.
ZIMRA has decided not to allow the company to take tax credits for capital expenditure as previously promised, Zimplats.
The platinum miner said it would not contest the tax demand, but had lodged an objection to the payment of penalties and interest. Discussions with ZIMRA are underway, it said.
It was not immediately clear if other mining firms have been slapped with revised tax bills by ZIMRA, as Zimbabwe embarks on an aggressive revenue collection drive to plug a $400 million in its national budget for 2012.
Zimplats, which makes up about a tenth of Impala's annual output, has started a $460 million expansion to increase output from about 180,000 ounces a year to 270,000 ounces annually.
The firm has been hit by low metal prices, resulting in a 10 percent decline in revenue to $473 million in the full year to June 2012 from $527 million in 2011. Profit after tax was $122 million this year, 39 percent down from $200 million previously.