Business Connexion`s (BCX`s) long-running dispute with the South African Revenue Service (SARS) has been settled, with BCX agreeing to pay SARS R159 million.
The group says in a statement issued this afternoon that this is in full settlement of the tax liabilities relating to the dispute.
BCX has in the past indicated that the total exposure, including interest, might amount to up to R350 million.
The dispute centred on the value of the Persetel and Q Data trademarks claimed as a deduction from BCX`s (formerly Comparex`s) taxable income for the financial years 1995 to 2004.
"Obviously it would have been nice to have got the full value of the trademarks," says financial director Alan Farthing. "But it`s been hanging over us for a few years now." He adds that the issue has also been occupying management time and "now management can concentrate on what we are here for".
"So we decided it was in the interest of the company and shareholders to settle the dispute."
The group says its nondistributable reserves of R94.2 million at 31 May 2004, relating to the trademark deductions, will now be released.
Farthing says this was raised in accordance with South African accounting practice and will now become distributable and released into the income statement to offset the tax payment.
He adds that the R159 million payment means the R350 million set aside to cover the liability means the balance of about R200 million has also been freed up for use.
The BCX share was last at 450c, up 10c or 2.3% from yesterday`s close.
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