TINASHE MAKICHI
Zimbabwe’s largest platinum producer, Zimplats, which has been crippled by prolonged litigation, has fully settled its tax dues under dispute, Business Times can report.
The platinum miner said it filed all the income tax returns required and paid the taxes which were due.
Zimplats said the fiscal legislation in Zimbabwe was volatile, highly complex and subject to interpretation.
The resources concern was subjected to a review of its historic income tax returns. In connection with such reviews disputes arose with the Zimbabwe Revenue Authority (Zimra) over the interpretation and/or application of certain legislation, Zimplats said.
“The group has, on a without prejudice basis, settled the disputed liabilities involved in these cases and therefore, no further liabilities will arise in respect of these disputed tax matters,” Zimplats said in a statement.
On foreign currency taxes, Zimplats is required to pay taxes in accordance with the laws of Zimbabwe, specifically the Income Tax Act (Chapter 23:06), as read with the Finance Act (Chapter 23:04).
Through a Public Notice 26 of 2019 published on June 19, 2019, the tax authorities, introduced a computation formula which would consequently require an apportionment of such income tax payment between ZW$ and US$.
The group said it has been lawfully computing and effecting payment of income taxes in ZW$ in settlement of its tax liabilities.
The tax authorities indicated during December 2020 that they hold a different interpretation of the fiscal legislation, as read with the public notices available to guide tax payers and require the operating subsidiary to pay income taxes in US$ after February 22, 2019.
Zimplats noted that expert tax and legal views on this matter were that the settlement of these taxes in ZW$ by the group was in full discharge of its obligations.
“This ongoing difference in interpretation continues to result in uncertainty associated with the payment of taxes in US$, with the resultant effect that, it is possible that at a future date, on conclusion of the matter, the outcome may vary significantly and may impact financial results in the year in which such a determination is made.”
In the absence of a legal basis upon which to base the estimation, Zimplats noted that it is unable to quantify at this stage of the potential impact.
