For years, Benhaus Mining enjoyed one of the key tax breaks given to mining ventures under the Income Tax Act: it was entitled to claim deductions of capital expenditure. But in 2013 the commissioner of the SA Revenue Service (Sars) decided Benhaus was "not a mining company" and raised additional assessments. Though Benhaus made objections, these were not upheld. The company fared no better at the tax court in Joburg. However, its complaints have now met a more receptive ear at the Supreme Court of Appeal, where five judges told Sars it was wrong, and that the commissioner must allow for the deduction of capital expenditure Benhaus had claimed for mining equipment. It’s an important win for Benhaus, which would otherwise face huge financial losses in the form of understatement penalties, interest for underpaid provisional tax and the costs order in the tax court. At the start of the judgment, acting deputy judge president Carole Lewis said the act defines "mining" as "every method o...

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