The SA Revenue Service (Sars) is pursuing Astron for R2.7bn with the tax agency saying the company is liable for unpaid excise duties and levies.
Astron, owned by commodities trader and mining group Glencore, disputes the tax liability and is fighting tooth and nail to show legal course on why it has not short-changed the fiscus.
The tax dispute emanated from a customs and excise audit conducted by Sars, which spanned May 2015 to March 2017 — before Glencore took over the energy group.
After the audit the tax agency claimed Astron, which operates more than 800 fuel stations across SA, owed the fiscus R2.7bn — an outcome the company is challenging on several grounds.
One reason advanced by Astron is that it was entitled to refunds on excisable or fuel levy goods in an amount at least equal to the amount claimed by Sars.
The agency has rejected Astron’s position — Sars’ internal appeal committee dismissed the company’s internal appeal — meaning the matter is now likely to be resolved by the courts.
Until arguments are heard, further details of the dispute are likely to be vague at best, given the strict confidentiality of tax matters.
Astron’s stations have undergone a major revamp and rebranding since the takeover by Glencore in late 2017 in a deal worth $1bn, which was concluded in 2019.
The deal saw Glencore outmuscle Sinopec to take over Chevron’s assets in SA and Botswana in co-operation with a consortium of BEE shareholders — giving birth to an outfit called Astron.
Apart from the vast petrol stations network, which used to trade under the banner of Caltex, Glencore also took ownership of a 100,000 barrel-a-day refinery in Cape Town.
The refinery is one of only two crude oil refineries operating in SA. The country has lost about 50% of its refining capacity over the past five years.
Astron’s executives told MPs in March that the company would invest about R6bn to install new equipment and become compliant with SA’s cleaner fuel specifications ahead of a 2027 deadline, according to a report by Reuters.
Glencore last year said it had so far invested $175m in the Cape Town oil refinery and related projects after acquiring Astron Energy.
Sars has not been shy to pursue companies it believes have short-changed the fiscus — even if that means going to court.
The fiscus last year netted R4.5bn from AB InBev’s SA subsidiary, SA Breweries Ltd, after the tax agency and the brewer settled their tax dispute.
The fight centred on the 2017 transaction in which AB InBev sold its stake in Coca-Cola Beverages Africa after its purchase of rival brewer SABMiller.
In October petrochemical group Sasol was granted leave to appeal against a high court decision that its treasury unit domiciled in the Isle of Man is liable to pay taxes in SA, in a high-stakes case that might see the company cough up as much as R3bn to Sars.
The receiver of revenue is also suing multinational sportswear manufacturer Adidas over unpaid taxes amounting to R1.9bn, accusing the sportswear company of underpaying customs duties, as first reported by Business Day.
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