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Amcu mediator: Platinum companies may have avoided tax

Jenna Etheridge

A negotiator says the firms involved in a dispute with the Association of Mineworkers and Construction Union may be guilty of tax and wage evasion.

A union negotiator says mining companies could be moving part of their profits to countries with low or no tax on profits to escape tax and avoid paying higher wages. (Oupa Nkosi, M&G)

Platinum companies involved in an extended wage dispute with mineworkers might be guilty of tax and wage evasion, a union negotiator claimed on Thursday.

“When it comes to the affordability issue ... why have they, for the last 10 years bar two years, been selling metals under the global market price?” asked Association of Mineworkers and Construction Union (Amcu) negotiator Brian Ashley, at a Cape Town Press Club breakfast.

“We think that this has got to do with the process of transfer pricing or worse, mis-invoicing, which is an illegal offence.”

He claimed mining companies could be moving part of their profits to countries with low or no tax on profits to escape tax and avoid paying higher wages.

Ashley has been negotiating for Amcu in labour court-facilitated talks with platinum companies Lonmin, Impala Platinum, and Anglo American Platinum in Johannesburg.

Amcu members at the three companies downed tools on January 23, demanding a basic monthly salary of R12 500.

Annual reports
Ashley, an Alternative Information and Development Centre director, said his suspicions were based on a comparison of the companies’ annual reports and annual market prices of mineral resources.

He said in the last decade, Lonmin seemed to have forfeited about R1.9-billion in revenue from sales, using the prevailing rand/US dollar exchange rate.

Similarly, Impala Platinum’s sales of platinum, palladium, and rhodium showed a forfeited revenue of around R2.8-billion, he claimed.

“We still have to put all the dots together to get to the absolute conviction that what we are dealing with is tax evasion, capital flight, and wage evasion.”

He said he had approached the national treasury and the South African Revenue Service with the information, but had been met by a “brick wall”.

“They don’t seem to be very interested.”

Ashley said further information would be released at a press briefing in Johannesburg on Monday. – Sapa

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