Life Healthcare is at loggerheads with the SA Revenue Service (SARS) over a hefty tax bill, the private hospital group said on Thursday.
The company, which released its full-year results in the morning for the period to September, said the dispute with the taxman related to value-added tax (VAT).
“The group is disputing the interpretation by the tax authorities in South Africa, the South African Revenue Service, of a contractual arrangement between Life Healthcare and its subsidiary companies related to payroll services and the resultant VAT treatment,” the company said without providing further details.
“Even though there is no loss to the fiscus and the group’s strong legal and tax opinions on the matter, the group has prudently provided R199-million.”
Life Healthcare reported that group revenue from continuing operations increased 4.9% to R28.2-billion. This consisted of a 5% increase in southern African revenue to R20-billion and a 2.8% increase in international revenue from continuing operations to R7.7-billion.
It also said the private hospital group is in a strong financial position, noting that available undrawn bank facilities as at September 30 amounted to R4.4-billion.
“In addition, the group, through its funding company Life Healthcare Funding, launched its inaugural listed domestic medium-term note programme during 2022, successfully raising R1-billion across three- and five-year tenures.
“The group also refinanced some existing UK debt, helping to move the bulk of our debt maturities to 2025 or beyond.”
The company, which operates in 13 countries, said it expects to spend R2.9-billion in capital expenditure in the new financial year, which it said will be funded from internal sources or debt.
It added that it is bullish about its prospects going into the new financial year.
“For our southern African operations, we currently anticipate continued volume growth driven by the normalisation of our case mix, as well as [the] introduction of new funder network deals.
“We also expect continued progress in expanding non-acute services within our operations by the launching of new clinical products in partnership with funders and select acquisitions in non-acute businesses,” it said.
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