Kumba announces its agreement with the South African Revenue Service (“SARS”) to settle a dispute relating to assessments received for the years 2006 to 2010 inclusive, and the tax treatment of the relevant issues in the years 2011 to 2015 inclusive, for a full and final total settlement amount of R2.5 billion (approximately $185 million). Shareholders are referred to the announcements released on the Stock Exchange News Service of the JSE Limited on 29 February 2016 and 13 September 2016 regarding the tax discussions between Sishen Iron Ore Company (“SIOC”), a 76.3% subsidiary of Kumba, and SARS.
Kumba had already provided for an amount of R1.5 billion in its annual financial statements for the tax years up to 2015, and an additional R1.0 billion will be accounted for in 2016 in respect of this settlement agreement. The settlement will be paid in full in Q1 2017, with appropriate adjustments made for current advance payments held on account.
As a responsible corporate citizen, our policy is to be tax compliant in all jurisdictions in which we operate.
Themba Mkhwanazi, CEO of Kumba, said: “I am pleased that we have reached this important settlement with SARS, providing clarity for all and enabling us to focus our efforts on ensuring that Kumba continues to operate at the optimal level and furthers its position as a major economic and social contributor to the South African economy.”
Kumba generates substantial value for all its stakeholders and is fully committed to the transformation of the South African mining industry and to the wider societal and economic benefits that the Company brings; for example in 2015 alone, a year during which the iron ore price fell sharply, Kumba contributed R900 million in corporate taxes and mineral royalties, R4.7 billion in salaries and wages, R15.2 billion in local procurement, R6.8 billion of capital reinvested in the business and R174 million in social investment in health, housing, education and small business development.