Despite the fact that the mining sector has, in recent years, indicating a downward trend in the economy, mining operations remains one of the country’s largest industries and still play a vital role in the economy and
contribution to the fiscus.
Navigating through complex and often uncertain mining tax laws requires expert knowledge and technical know-how. As if that is not enough, changes in legislation and court decisions increase the tax risks that mining entities are facing. For instance, the tax treatment of successful and unsuccessful exploration expenditure poses challenges as far as the interpretation of legislation is concerned.
Our procedures addressing risks related to mining tax is designed to ensure that:
- Adequate provision of the mining tax to be paid to revenue authorities is recognised.
The current and deferred tax is fairly presented and disclosed in accordance with the applicable accounting standards and comply in principle with the provisions of the Income Tax Act, supporting legal precedent and/or current SARS’s practice.
Furthermore, compliance with legislation that regulates the imposition and calculation of royalties is very important.
To ensure that the correct amount of royalties are paid or provided for, we perform procedures that include among others:
- Review of controls relating to compliance with legislation that regulates the imposition and calculation of royalties.
- Review calculation of royalties provided by management.
- Re-perform the calculation of royalty tax payables based on facts and