Zimbabwe Platinum Mines and the Zimbabwe Revenue Authority are squaring up over the question of VAT, it has been reported.

It was announced recently by Impala Platinum, the largest shareholder in Zimbabwe Platinum Mines, that the Zimbabwe Revenue Authority is demanding US$12.9 million in VAT from the company following the amendment of the VAT act.

The new law obliges firms to pay VAT on foreign contractors' service fees in foreign currency.

This fee is then refunded in local currency as mining companies in Zimbabwe are zero rated on VAT.

However, according to Herald Business Zimbabwe Platinum Mines has complied fully with the new ruling since it has been passed - what is in dispute is tax already paid and refunded in local currency.

"Zimbabwe Platinum Mines passed on VAT in local currency and got refunds in local currency," a Zimbabwe Platinum Mines source told the publication.

"But the problem now is the Zimbabwe Revenue Authority is demanding US$12.9 million for the period between January 2006 and October 2007 for which Zimbabwe Platinum Mines had already paid that money in local currency and got their refunds."

"In the event that Zimplats pays the money in foreign currency, they will be refunded in local currency at the prevailing rate."

"It is very difficult to understand the motive," the source added.

Source:

Zimplats, Zimra in tax row
http://www.herald.co.zw/inside.aspx?sectid=30946&cat=8

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