NOT SUCH A STRAIGHT BAT
If the world’s second-largest tobacco company thought its tax problems in SA had disappeared, it should think again
It’s been a long time coming, but the ghosts of tax liabilities past seem to be catching up with British American Tobacco (BAT). This week, it emerged that the SA Revenue Service (Sars) sent a letter to BAT’S SA arm in October 2018 in which Mark Kingon — who was acting commissioner at that stage — levied a demand for R143m.
Rather more important than the money, though, is this line in the letter: the commissioner “is of the prima facie view that BAT SA did not disclose all material facts when requested by the auditors during the audit”. Sars goes on to use all sorts of nasty words, such as “nondisclosure” and “misrepresentation”, and even accuses BAT of making “a false declaration” — all of which led to a loss to the fiscus.
Admittedly BAT is a tobacco company, but is this the behaviour you’d expect from an entity that holds media conferences to bemoan how illicit tobacco manufacturers aren’t paying the fiscus its due? It puts a new slant on BAT’S recent slogan, #takebackthetax.
Last year, in fact, the Tobacco Institute of SA, which is sponsored by BAT, raged at the sheer “outrage” of the R7bn lost to illicit tobacco, saying “there are known manufacturers, licensed by Sars, refusing to pay their taxes”.
Just imagine.
Alarmingly, this new front in BAT’S tax battle is quite apart from a R2.1bn dispute the company has with Sars over its “debt structuring”. (Unlike the case of the R143m claim, BAT did disclose that R2.1bn potential liability to shareholders.)
The tobacco company’s latest annual report notes
This new front in BAT’S tax battle is quite apart from a R2.1bn dispute the company has with Sars