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Div tax

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koos2
Super Contributor
The div tax we all now pay, that the company doesnt, how does that impact on their tax and maybe more importantly their profit numbers as a % ?. Are we comparing apples if we dont take this into account?
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7 REPLIES 7
AJT
Super Contributor
Agreed, not comparing apples with apples. Take Sasol for example, earlier in the year they declared an interim dividend of R5.70 per share and stated “no change from same period last year”. There was however a change in that the net divi is now R4.85 as opposed to R5.70 previously [no change would have required a dividend of R6.33 to be declared], this is also resulting in companies overstating profits – one never really hears the analysts speak about it on TV. I can remember Simon raised this issue earlier in the year, but can’t remember anyone else speaking about it.
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SimonPB
Valued Contributor
but it now almost worked out of the system as it came in April last year .. overall it lowers tax rate, hiked profits
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AJT
Super Contributor
but suspect % earnings increase in the coming year will be lower than last year..
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koos2
Super Contributor
So, div growth of 15% is/was not! Bloody onions!
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Not applicable
technically, they should have passed on the STC savings to shareholders via the dividends. So instead of them incurring STC, we would incur DWT. I would be interested to see if any analysts out there have calculated whether this has actually happened or not
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Preston
Super Contributor
STC saving is always distributed in the form of higher bonus, higher salaries and also budgeting for fines for not meeting equity target or other industry targets.
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SimonPB
Valued Contributor
skaap, hard to really fathom, best metric is dividend cover ratio and for biggies that hasn't changed much - so in short they have .. but the spin was look at our great div increase, when actually it wasn't as great
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