Business / Economy
Negotiating turbulent tax & compliance legislation key to growth in mining sector
17 Jul 2013 at 07:21hrs | Views
The South African mining industry, currently facing one of the biggest downturns it has ever seen, has been fraught with confusion about the introduction of new legislation, which reports say could worsen the industry outlook even further. As a result, organisations are becoming increasingly aware of the need to invest in the highest level of expertise to help them navigate this new climate.
According to Bernard du Plessis, joint head of ENS's tax department with Peter Dachs, the current turmoil in the South African mining sector is creating very complex challenges for mining companies, foreign investors and the SA government.
"SARS indicated earlier this year that multinationals based in SA - particularly in the mining, automotive, pharmaceutical and finance sectors - will need to pay special attention to taxes this year, especially with regards to transfer pricing and double taxation, which it has identified as a problem. This adds an additional layer of pressure to many companies," says du Plessis.
As the industry calls for clarity on mining taxes, and government is considering the implementation and review of new propositions to the Mining Minerals Rent Tax, and various other mining tax policies, Dachs says clients are demanding new, specialised services from their consultants.
"We have certainly seen an increase in demand from clients for niche and holistic services to provide legal and compliance advice, amidst the constantly changing legal landscape – not only locally, but particularly throughout Africa," says Dachs.
"The firm identified the need for a specialist mining tax division to address the growing need of mining companies to be compliant with all aspects of the changing law, and is now fully fledged to offer its clients an even broader, more specialised range of services with the arrival of Andries Myburgh, a market leading expert in corporate income tax, who has extensive industry experience in the mining sector. Myburgh has more than 15 years of tax consulting in this sector, and has worked at various top performing SA firms.
"Mining companies cannot tolerate further obstacles to growing their operations in this current environment and are therefore critically aware of the need to ensure that they are compliant and up to speed with new and proposed legislation," says Myburgh.
Myburgh explains that last month former United Nations secretary-general Kofi Annan called for the establishment of a multilateral tax system in Africa, in an effort to promote greater transparency in the extractive industries, such as mining. "He called for international legislation and regulations to be instilled throughout Africa to close down on deals that promote unethical tax avoidance. It is not just South Africa going through changes; specialised tax and compliance expertise will be a key element to securing the competitive advantage in African markets," he says.
Dachs says that smart hiring decisions will in the long run ensure sustainability and growth both for companies and their clients, especially as firms seek to differentiate themselves in the changing face of the mining sector.
"The rapidly changing face of the mining sector means that companies playing in this arena must change gears and provide solutions that use niche level skills, both for the longevity of the company and the sector."
"Our tax department is further supported by specialists in other areas of the firm who bring to bear their unique expertise in areas such as litigation, environment, corporate commercial and banking and finance – this enables us to provide clients with a 360 degree solution, especially in the mining industry," du Plessis concludes.
Myburgh is supported by top tax specialists, Kristel van Rensburg, Katherine Boel, Andre Vermeulen and Gerdus van Zyl, who also joined the firm in July as part of its strategy to hire niche expertise in the mining tax arena.
According to Bernard du Plessis, joint head of ENS's tax department with Peter Dachs, the current turmoil in the South African mining sector is creating very complex challenges for mining companies, foreign investors and the SA government.
"SARS indicated earlier this year that multinationals based in SA - particularly in the mining, automotive, pharmaceutical and finance sectors - will need to pay special attention to taxes this year, especially with regards to transfer pricing and double taxation, which it has identified as a problem. This adds an additional layer of pressure to many companies," says du Plessis.
As the industry calls for clarity on mining taxes, and government is considering the implementation and review of new propositions to the Mining Minerals Rent Tax, and various other mining tax policies, Dachs says clients are demanding new, specialised services from their consultants.
"We have certainly seen an increase in demand from clients for niche and holistic services to provide legal and compliance advice, amidst the constantly changing legal landscape – not only locally, but particularly throughout Africa," says Dachs.
"The firm identified the need for a specialist mining tax division to address the growing need of mining companies to be compliant with all aspects of the changing law, and is now fully fledged to offer its clients an even broader, more specialised range of services with the arrival of Andries Myburgh, a market leading expert in corporate income tax, who has extensive industry experience in the mining sector. Myburgh has more than 15 years of tax consulting in this sector, and has worked at various top performing SA firms.
Myburgh explains that last month former United Nations secretary-general Kofi Annan called for the establishment of a multilateral tax system in Africa, in an effort to promote greater transparency in the extractive industries, such as mining. "He called for international legislation and regulations to be instilled throughout Africa to close down on deals that promote unethical tax avoidance. It is not just South Africa going through changes; specialised tax and compliance expertise will be a key element to securing the competitive advantage in African markets," he says.
Dachs says that smart hiring decisions will in the long run ensure sustainability and growth both for companies and their clients, especially as firms seek to differentiate themselves in the changing face of the mining sector.
"The rapidly changing face of the mining sector means that companies playing in this arena must change gears and provide solutions that use niche level skills, both for the longevity of the company and the sector."
"Our tax department is further supported by specialists in other areas of the firm who bring to bear their unique expertise in areas such as litigation, environment, corporate commercial and banking and finance – this enables us to provide clients with a 360 degree solution, especially in the mining industry," du Plessis concludes.
Myburgh is supported by top tax specialists, Kristel van Rensburg, Katherine Boel, Andre Vermeulen and Gerdus van Zyl, who also joined the firm in July as part of its strategy to hire niche expertise in the mining tax arena.
Source - Epic Communications