Kumba shares tumble after it announces tax settlement

[Platinum Wealth]

Kumba Iron Ore’s share price tumbled as much as 5% to R201.74 on Friday morning after it said it has agreed to pay R2.5bn to settle a tax dispute with the South African Revenue Services (SARS).

 

Although substantially lower than the R5.5bn SARS originally demanded in February 2016, the settlement was R1bn higher than Kumba had provided for in its financial results.

 

Kumba said in Friday’s statement the settlement would be paid in full by the end of March.

 

In February 2016, Kumba issued a statement saying its 74%-owned subsidiary Sishen Iron Ore Company had received a demand from SARS relating to the tax years 2006-2010 for R5.5bn. This included R3.7bn in interest and penalties.

 

Kumba said a year ago it was objecting to SARS’s assessment as it believed it had paid all its taxes in full.

 

"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," CEO Themba Mkhwanazi said on Friday.

 

Source: Business Day