Zimplats will have an additional liability for Additional Profits Tax for the period July 1 2004 to December 31 2014 after the group lost an appeal against a ZIMRA tax determination. Zimplats had appealed to the Special Court for Income Tax Appeals in Zimbabwe against a determination by the Commissioner-General of ZIMRA that income tax assessed losses are not allowable deductions for purposes of calculating Additional Profits Tax (APT).

At the time of the appeal, the Commissioner-General of ZIMRA had agreed to suspend the payment of the disputed APT pending the outcome of the case.

Following the hearing of the case in the Special Court for Income Tax Appeals on September 15 2014, judgment was reserved and subsequently handed down on March 13 2015.

The Presiding Judge dismissed the operating subsidiary’s appeal and ruled that the deduction of an assessed loss carried forward from a previous year of assessment is not an allowable deduction for the purposes of calculating APT.

“The effect of the judgment is that Zimbabwe Platinum Mines (Private) Limited will have an additional liability for APT for the period July 1 2004 to December 31 2014,” said CEO Alex Mhembere in a statement.

The principal tax per the assessments amounts to $33.8 million and the company may be liable for additional interest and penalties.

Mr Mhembere also said as reported in the Company’s Half Year Directors’ Report and Condensed Interim Financial Statements for the half-year ended 31 December 2014, the High Court of Zimbabwe in January 2015 ruled in favour of the operating subsidiary in the case involving a dispute it had with ZIMRA over which mining royalty rates are applicable to the operating subsidiary.

“The effect of that judgment is that the operating subsidiary overpaid royalties in respect of the period between 2004 and 2014.”

He said Zimplats is engaging ZIMRA on the financial impact of the judgments and the modalities of giving effect to them. — Wires

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