Industrial distributor Hudaco Industries on Tuesday said assessments it had received from the South African Revenue Service (Sars) did not dispute the group’s black economic-empowerment (BEE) structure, as initially thought, but targeted other arrangements entered into by third parties without Hudaco’s knowledge.
At the company’s results presentation last month, the group indicated that it was issued a notice by Sars in December wherein it communicated concern that Hudaco’s BEE structure, which was implemented in 2007, was possibly a scheme to avoid taxes.
Sars indicated that it intended to tax the group on certain aspects associated with its BEE structure.
The amounts being assessed by Sars included tax on recategorised interest imputed on Hudaco of R279-million; tax imputed on Hudaco as it allegedly became entitled to an amount because of security arrangements, which amounted to R143-million; the impact of secondary tax on companies credits disallowed, which amounted to R72-million; interest of R446-million and penalties of R987-million.
However, Hudaco financial director Clifford Amoils stated that the counsel reviewed all documentation and established that the company had a strong case.
Hudaco later also indicated that it was confident of refuting the assessments and stated that it would lodge objection thereto and pursue all appropriate legal remedies, including application for a deferral of payment until the matter had been resolved.