SBK - Standard Bank - Impact Of Tax Changes In Bud
SBK SBPP SBKP
SBK
SBK - Standard Bank - Impact Of Tax Changes In Budget Speech 2007
Standard Bank Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1969/017128/06)
South African Share Code: SBK
Namibian Share Code: SNB
ISIN: ZAE000057378
South African Share Code: SBPP
ISIN: ZAE000056339
South African Share Code: SBKP
ISIN: ZAE000038881
("Standard Bank" or "the Company")
In his budget speech on 21 February 2007, the Honourable Minister of
Finance proposed the introduction in 2008 of a 10% withholding tax on
dividends and the elimination of STC (Secondary Tax on Companies) in two
stages: a reduction in the STC rate from 12.5% to 10% effective 1 October
2007 and the abolition of STC during 2008. The text of draft legislation
giving effect to these proposed changes has not yet been released.
Numerous enquiries have been received from preference shareholders as to
whether Standard Bank will increase preference dividends in view of the
anticipated negative impact on preference shareholders of the new dividend
tax while Standard Bank, as issuer, is expected to benefit from the
proposed abolition of STC.
This matter is still under investigation but preliminary legal advice
indicates that any steps taken to increase preference share dividend rates
to compensate preference shareholders for this new tax, would require an
amendment to the Company`s Articles of Association, and is thus a matter to
be considered by ordinary shareholders.
It is believed that an increase in the dividend rate on Standard Bank`s non-
redeemable, non-cumulative preference shares to compensate for the new
dividend tax would be consistent with the intention of the existing income
tax adjustment clause in the Company`s Articles of Association. It is
accordingly planned, in principle, to submit a special resolution to
ordinary shareholders once sufficient clarity exists on the text of the
legislation to enact the proposed tax changes.
A further announcement in this regard will be made once the detailed
legislation is published.
Johannesburg
23 February 2007
Sponsor
Standard Bank
Date: 26/02/2007 07:53:02 Produced by the JSE SENS Department.
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