Namibia: Court Rules Metals Recovery Is Manufacturing

A company involved in recovering copper and other metal from the waste products of copper smelting at Tsumeb has won a legal victory against the minister of finance and commissioner of inland revenue to have its operations recognised as a manufacturing activity.

In a judgement delivered in the Windhoek High Court last Thursday, acting judge Collins Parker set aside the minister of finance's decision not to register the company TCIMS Industrial (Namibia) as a manufacturing enterprise in terms of the 1981 Income Tax Act. Acting judge Parker also declared that the process through which TCIMS Industrial processes copper smelting slag to recover copper and other metals from it amounts to manufacturing activity.

TCIMS Industrial sued the minister of finance, the commissioner of inland revenue, and the minister of industrialisation, trade and SME development after the commissioner of inland revenue, Justus Mwafongwe, notified the company in July last year that its application for registration as a manufacturing enterprise had been turned down.

TCIMS Industrial processes slag - waste matter from the copper smelting process - at the Tsumeb smelter of Dundee Precious Metals to recover copper matte, which is an impure form of copper, and white metal from the slag.

Although the Ministry of Industrialisation, Trade and SME Development's permanent secretary, Gabriel Sinimbo, informed his counterpart at the Ministry of Finance, Ericah Shafudah, in a letter in September 2016 that TCIMS Industrial's operations had been inspected and that the company was found to be a manufacturing entity, the Ministry of Finance rejected the application to register the company as a manufacturing enterprise ten months later.

In the judgement delivered last week, acting judge Parker ruled that previous court decisions on the definition of manufacturing overwhelmingly supported an argument that the finance minister should have found that TCIMS Industrial's operations are a manufacturing activity as defined in the Income Tax Act.

Acting judge Parker noted that the essence of manufacturing has been described as the making of something that was different from the article as it existed before it had undergone the manufacturing process. TCIMS Industrial's processing of slag, which is a waste product that on its own has no economic value, into new products in the form of copper matte and white metal, which have economic value because of being commodities that can be used and sold, amounts to a manufacturing operation, acting judge Parker found.

He also found that in terms of the Income Tax Act the minister of finance should have had the agreement of the minister of industrialisation, trade and SME development for his decision on the company's application to be registered as a manufacturing enterprise. The finance minister took a decision on the application without such agreement, though.

TCIMS Industrial was represented by lawyer Phillip Barnard, instructed by Cronjé & Co. Sakeus Akweenda represented the two ministers and the commissioner of inland revenue on instructions from the government attorney.

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