| |
Significant accounting judgements, estimates and assumptions
Management determines the income tax charge in accordance
with the applicable tax laws and rules which are subject to
interpretation. The calculation of the Group's total tax charge
involves judgements and estimations in respect of certain
items whose tax treatment cannot be finalised until resolution
has been reached with the involved parties. The resolution of
some items may give rise to material profits, losses and/or cash
flows. Where the effect of tax is not certain, taxation liability
estimates are made by management based on the available
information, using either the most likely outcome approach or
the expected value approach. Tax assets are only recognised
when amounts receivable are virtually certain. The resolution
of taxation issues is not always within the control of the Group
and, as a result, there can be substantial differences between
the taxation charge in the statement of profit or loss and other
comprehensive income and the current tax payments.
Summary of material accounting policies
Current tax is calculated as amounts that are expected to be paid
(or recovered), using the tax rates and laws that have been enacted
or substantively enacted by the reporting period date. Deferred tax
is calculated on all taxable temporary differences that exist at the
reporting date, except those that are exempted based on IAS 12.
Telkom periodically evaluates positions taken in tax returns with
respect to situations in which the applicable tax regulation is subject
to interpretation. The Group establishes provisions where the position
is considered more likely than not to occur. The provision is recognised
and measured based on the single most likely outcome approach.
| |
Group |
Company |
| |
Restated7
31 March
2023
Rm |
31 March
2023
Rm |
| Taxation1 |
(655) |
3 531 |
(59) |
2 039 |
| Discontinued operation |
(158) |
(113) |
– |
– |
| Continued operations |
(497) |
3 644 |
(59) |
2 039 |
| South African normal company taxation |
(258) |
(499) |
(30) |
– |
| Current taxation2 |
(258) |
(502) |
(30) |
– |
| Overprovision for prior year |
– |
3 |
– |
– |
| Deferred taxation (refer to note 8.2) |
(239) |
4 031 |
(29) |
2 039 |
| Capital allowances1 |
(1 115) |
3 252 |
(362) |
1 490 |
| Provisions and other allowances |
412 |
293 |
(131) |
345 |
| Tax losses1 |
458 |
470 |
471 |
197 |
| Acquisition of BCX3 |
9 |
9 |
– |
– |
| (Underprovision)/overprovision for prior year2 |
(3) |
7 |
(7) |
7 |
| Withholding tax |
– |
(1) |
– |
– |
|
|
|
|
|
| Reconciliation of taxation rate |
% |
% |
|
|
|
|
|
| South African normal rate of taxation |
27.0 |
27.0 |
27.0 |
27.0 |
| Increased/(decreased) by the following adjustments: |
(1.5) |
(0.9) |
(25.4) |
(9.7) |
| Non-taxable income |
(3.1) |
0.1 |
(25.0) |
1.3 |
| Dividends received |
– |
– |
(24.5) |
1.3 |
| Profit on sale of assets |
– |
– |
(0.3) |
– |
| Cell captive fair value adjustments |
– |
– |
(0.2) |
– |
| Other exempt income8 |
(3.1) |
0.1 |
– |
– |
| Non-deductible expenditure4 |
2.0 |
(0.9) |
(0.4) |
(11.1) |
| Capital expenditure5 |
3.4 |
(0.5) |
0.2 |
(0.3) |
| IFRS 2 share-based payment adjustments |
(2.0) |
0.2 |
(1.2) |
0.2 |
| Interest and penalties |
0.1 |
– |
– |
– |
| Other disallowed expenditure |
0.5 |
(0.6) |
0.6 |
(11.0) |
| Prior year adjustments |
(0.4) |
– |
– |
0.1 |
| Prior year (overprovision)/underprovision tax expense2 |
(0.4) |
– |
– |
0.1 |
| Other taxes |
– |
(0.1) |
– |
– |
| Differences in tax rates, foreign tax and withholding tax |
– |
(0.1) |
– |
– |
| Effective rate6 |
25.5 |
26.1 |
1.6 |
17.3 |
| 1 |
The increase of R4 186 million in the prior year tax credit to a tax expense of R655 million in the current year is primarily due to the movement from a significant loss before tax in
the prior year as a result of the impairment of property plant and equipment and intangible assets to a profit before tax in the current year. |
| 2 |
The decrease in current tax is primarily attributable to the reduction in the Group's taxable income. |
| 3 |
Non-deductible write-offs in respect of previous acquisition of BCX. |
| 4 |
The current year tax expense is increased by the non-deductible capital expenditure, whereas the prior year tax credit was reduced by these adjustments. |
| 5 |
The increase of greater than 100% in the non-deductible capital expenditure is primarily attributable to an increase in assets scrapped, that do not qualify for tax deductions. |
| 6 |
The decrease of 0.6% in the effective tax rate is primarily attributable to the non taxable accounting treatment of asset disposals as well as share based payments. |
| 7 |
Refer to note 12.2. |
| 8 |
This relates to relates to the accounting treatment of scrap items sold. |
|
