LocalNews

Zimplats wins US$9.6 million lawsuit

By Business Reporter

PLATINUM producer, Zimbabwe Platinum Mines (Zimplats) has won a US$9.6 million lawsuit against Zimbabwe Revenue Authority (ZIMRA) over selected customs duty rebates, including penalties levied between 2009 and 2013.

Zimplats Holdings Limited, Chief Executive Officer Alex Mhembere, announced that “As the operating subsidiary had previously settled the disputed liabilities on a without prejudice basis pending the determination of the case, the net impact of the judgement is that ZIMRA is required to repay to the operating subsidiary the amount of the fines imposed by ZIMRA, amounting to US$9.6 million.”

The customs duties matter involved a dispute that arouse between Zimplats and ZIMRA over whether the platinum producer was entitled to claim, and to be granted, certain customs duty rebates that occurred between 2009 and 2013.

Zimplats also questioned whether ZIMRA was entitled to impose penalties in respect to these customs duty rebates.

Following the hearing of the case at the High Court in April 2018, judgement was reserved and subsequently a written judgement was issued on 12 September 2018 in favour of Zimplats.

Zimplats had, however, settled the disputed liabilities involved in this case pending the determination of the matter by the court.

High taxes weighed down Zimplats profit due to the impact of the change in tax rate on deferred tax following the migration from a special mining lease to the mining lease tax regime.

At the time of publishing its integrated annual report for the year ended 30 June 2018, Zimplats, had filed legal proceedings at the High Court of Zimbabwe in relation to a historical customs duties matter, and no judgement had been passed.

Zimplats will now recoup $9.6 million from ZIMRA to add to its profit and loss account. “The operating subsidiary will be reversing the amount of these fines, US$9.6 million, which had previously been charged to the profit and loss account,” he said.

Zimplats reported a full-year profit before tax of US$166 million, recording a net profit of a paltry US$3 million.

“The presiding judge ruled that the operating subsidiary was not entitled to be granted the customs duty rebates that it had been granted between the years 2009 and 2013. The Judge however also ruled that ZIMRA was not entitled to impose the fines that it had levied on the operating subsidiary,” said Mhembere.

In July this year, ZIMRA lost another high court case in which it was seeking to compel the Law Society of Zimbabwe (LSZ) to pay Value Added Tax (VAT) on income earned from fees and subscriptions levied on the lawyers. ENDS//

 

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