Zimplats records $74,3m loss

HARARE - Zimbabwe Platinum Holdings (Zimplats) says it has recorded a $74,3 million loss for the year ended June 30 on the back of a surge in tax costs.

The Australian-listed miner yesterday said the loss — a 177 percent slump from a prior period profit position of $97,1 million — was a result of taxation for the year which stood at $130,5 million.

“Consequently, profit before income tax for the year amounted to $56,1 million, 56 percent lower than the $129 million for the previous year” the platinum miner said.

Zimplats’ taxes increased by 314 percent in the period under review due to the impact of two court judgments, where the High Court ruled against the miner in a case involving a dispute involving the Zimbabwe Revenue Authority (Zimra) over which mining royalty provisions were applicable to the Implats subsidiary.

The court ruled that the royalty provisions in the company’s mining agreement was to take precedence over royalty provisions set out in the Finance Act making Zimplats liable to pay royalties at the rate of 2,5 percent of the value of all minerals produced and not at the higher Finance Act rates.

Consequently, Zimplats overpaid royalties by $108 million in respect of the period between January 2004 and December 2014 ($95,8 million from January 2004 to June 2014).

In the second ruling, the Special Court for Income Tax Appeals delivered its judgment in a case involving a dispute between Zimplats and Zimra on the issue of whether income tax assessed losses are allowable deductions for purposes of calculating additional profits tax (APT).

The court ruled that an assessed income tax loss carried forward from a previous year of assessment is not allowable as a deduction in computing APT, effectively translating to an additional liability of $55,3 million for APT for the period from July 2004 to June 2014.

Meanwhile, the platinum producer’s revenue for the year dipped 29 percent to $408 million from $576 million mainly due to a 20 percent reduction in four elements (platinum, palladium, rhodium and gold) (4E).


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