Integrated report 2019
Exxaro Resources Limited
Tax report for the year ended 31 December 2019
Honest and transparent engagements with stakeholders on tax matters are summarised below.
| Stakeholder group | Key concerns and expectations | Our response | ||
| SARS | Non-compliance with tax laws resulting in reputational damage and financial loss in the form of penalties, interest and additional taxes Capacity constraints in the tax department due to numerous, ongoing SARS audits Complex restructuring transactions or sale/acquisition of investments/assets can expose Exxaro to adverse tax consequences Complex and regular tax legislation changes pose additional tax risks |
Regular interaction with a dedicated SARS relationship manager, building a relationship of trust and ethical behaviour as guided by the King IVTM* Managing tax risks within a board-approved framework Transparent behaviour by timeously responding to information requests, audits, application of voluntary disclosure programmes and detailed tax return submissions Implementation of a VAT analytics tool to proactively identify possibly incorrect VAT treatments Update and external audit of existing transfer pricing policies Using the Tax Ombud to ensure SARS is administratively compliant and adheres to its service charter for paying refunds and finalising audits Employing appropriately qualified tax staff and managing their performance Using approved expert legal tax advisers for all transactions:
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| Users of tax financial reporting such as shareholders and financiers | Tax reporting does not fairly represent the financial position of the Exxaro group of companies |
An automated tax consolidation tool was developed and customised by Deloitte according to Exxaro's needs to assist in calculating and preparing tax disclosure notes as required by IAS 12 Employing qualified tax professionals in the tax function to manage tax reporting |
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| Communities | A new non-profit company (a public benefit organisation with section 18A exemption) was established for the benefit of Exxaro employees and communities surrounding the areas in which Exxaro operates as there is a risk that communities are not benefiting, and money is not spent on approved public-benefit activities |
Senior Exxaro employees will serve as directors of the new non-profit company to ensure compliance with applicable laws and governance |
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