Zimplats says cleared US$34m tax liability
PLATINUM group metals (PGM) producer, Zimplats Holdings has cleared its outstanding tax matters with the government, the company’s annual financial statements for 2022 highlighted.
The miner, a unit of Impala Platinum Holdings, has been in court battles over disputes that arose with the Zimbabwe Revenue Authority (Zimra) on the interpretation or application of certain legislations.
“From time to time, the group is subject to a review of its historic income tax returns and in connection with such reviews, disputes can arise with Zimra over the interpretation and/or application of certain legislation.
“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.
The group said it has historically filed and continues to file all required income tax returns and pay taxes reasonably determined to be due, adding that the country’s fiscal legislation is volatile and highly complex and subject to interpretation.
Zimplats said judgment is required in determining the provision for income taxes due to the complexity and differences of interpretation of fiscal legislation, and application which may require determination through the courts.
“There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The group recognises liabilities for anticipated tax audit issues and uncertain tax positions based on estimates of whether additional taxes will be due. The assessment is based on an objective, unbiased interpretation of the fiscal legislation, informed by specialist independent tax and legal advice.
“Where, Zimra as the tax authority, makes an assessment that differs from that determined and initially recorded by the company, such difference in computation will impact the income tax expenses and liabilities in the period in which such determination is made. Irrespective of whether potential economic outflows of matters have been assessed as probable or possible, individually significant matters are included to the extent that disclosure does not prejudice the group,” Zimplats said.
However, the miner said it has since filed legal proceedings in the Special Court for Income Tax Appeals and the Supreme Court of Zimbabwe about various historical income tax matters and these cases are pending in the courts.
Zimbabwe last year ordered Zimplats to pay US$33,8 million in back taxes, arguing a tax holiday claimed by the firm had no legal basis.