SARS Settles Tax Dispute With Nampak

by Robert Lee, Tax-News.com, London

13 December 2007

The South African Revenue Service and Nampak, Africa's largest packaging company, have announced that a two-year tax dispute relating to an acquisition made by the company five years ago has been resolved.

In September 2005, SARS raised a number of assessments relating to the Malbak group of companies acquired by Nampak in 2002. In addition, a number of queries were subsequently raised by SARS regarding the tax affairs of Nampak, which led to a claim by the tax department for R738 million (US$109 million), reportedly made up of R223 million in taxes owed, R128 million in penalties and R387 million in interest.

Nampak disputed the tax claim, but in August 2007 an agreement was reached between the company and SARS for a task team representing both Nampak and SARS to be established, in an attempt to resolve the matters in dispute.

According to a joint statement by Nampak and SARS, a final agreement has now been reached and the matter is seemingly closed. However, neither the tax department nor Nampak have publicly disclosed the terms of this settlement.

"Following a complete review of all tax matters currently in dispute, Nampak and SARS have agreed to settlement terms to resolve these matters," the joint statement explained.

"This settlement brings to a close historical tax matters which date back several years and is a good illustration of what can be achieved through collaboration," the statement concluded.

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