LG rubbishes tax evasion claims

In response to allegations that electronics giant LG, is cheating the tax man, the company said this morning in a statement that it is confident that claims made in recent media reports that it is guilty of tax evasion will be met with the same rulings delivered by the High Court and Supreme Court of Appeal – rulings that exonerated LG Electronics of any wrongdoing in respect of South African Tax Law.

Sars revenue tax attorney, Petrus Erasmus filed court papers claiming LG is cheating by importing TV set components separately to avoid millions in import duty.

Responding to the application to the Constitutional Court by the South African Revenue Service (SARS), LG Electronics CEO, Mr Peet van Rooyen says the matter at hand has had quite a lengthy history and it is not the first time that it has been before the Courts. “In 2007, an application was brought before the High Court to determine the appropriate tariff heading for certain screens which were imported by LG. On this occasion and again in front of the Supreme Court of Appeal, LG Electronics was exonerated with SARS being criticised of its approach towards this case. It was with some surprise that LG was served with papers filed by SARS before the Constitutional Court where SARS, once again, seeks to appeal against the two clear and unambiguous decisions in favour of LG.”

The dispute between LG Electronics SA and Sars refers to plasma screens and inductors which LG imports into South Africa from Korea.

LG imports the two components separately and argues that it therefore does not need to pay import duty on them. The fact that the plasma screen and inductor can be assembled by any non-specialist using a cable, which is supplied, to create a TV set, does not make the importation of the two separate components taxable as imported TV units, says LG.