Coronation Fund Managers says its R716m tax dispute with the SARS may take up to two years to be finalised due to the length of time it takes for Constitutional Court processes to run their course.

Nevertheless, the Cape Town-headquartered asset manager plans to go on targeting offshore growth as it battles a stagnant economy and shrinking savings pool in its home market of SA.

Its SARS tax dispute relating to earnings from its offshore operations dates back to 2012.

A BusinessLIVE report notes that the crux of the tax dispute is whether profits of Coronation’s Irish subsidiary should have been included in the taxable income of the group’s SA holding company.

Coronation has applied to the Constitutional Court for leave to appeal against a February SCA ruling that it is liable for tax payments stemming from those operations. 

‘It’s not only a matter that affects Coronation, we believe it affects all the multinationals in SA given that it’s a matter of interpretation of the law that we need to get clarity on,’ said Coronation CEO Anton Pillay.

‘The next step naturally is to go to the Constitutional Court. There’s two parts to the process – the one is that Constitutional Court first needs to agree to hear the appeal, and then we go to court on the case itself. That can take anything up to two years.’

Pillay said it could take two to nine months just for the apex court to decide whether to hear the firm’s appeal against the SCA ruling.

He said Coronation made provisions to cover the disputed tax liability, which relates to the 2012 to 2023 financial years, should the Constitutional Court rule against it.

Pillay’s comments came after Coronation yesterday said profit fell 96.8% to R22m for the six months to end-March while revenue decreased 6.2% to R1.8bn.

Full BusinessLIVE report