Telkom on Tuesday said it will take its fight against the South African Revenue Services (SARS) to the highest court in the land after the Supreme Court of Appeal (SCA) last week ruled in favour of the taxman in a multi million rand matter.
Telkom in a statement to shareholders said it will approach the Constitutional Court for leave to appeal the SCA’s decision.
“Shareholders are reminded Telkom fully provided for the implications of the matter, as it relates to both the 2012 and 2014 years of assessment, in prior financial years and therefore this will be earnings neutral,” Telkom said.
“However, the cash flow implications of the outstanding liability of approximately R1 billion, which includes the implications of the judgement on the 2014 financial year, will be informed by a payment arrangement
to be agreed with SARS.”
The SCA last week dismissed Telkom’s argument that a R3.9-billion foreign exchange loss and a R136-million incentive bonus were deductible.
The decision by the SCA means that the tax liability of R875-million raised by SARS for the 2012 tax year will now stand unless the Constitutional Court rules in Telkom’s favour.
