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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 Supplied by www.sharenet.co.za Produced by the JSE SENS Department.
