Accounting policy
The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items
recognised in other comprehensive income or directly in equity.
Current tax
The current income tax charge is based on taxable income for the year calculated on the basis of tax laws enacted or substantively enacted by the end of the reporting period.
Deferred tax is calculated on all temporary differences under the liability method at 17% (2020: 17%).
Deferred tax
Deferred tax is provided in full, using the liability method, for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, if the deferred tax arises from initial recognition of an asset or liability in a transaction, other than a business combination, that at the time of the transaction affects neither accounting nor taxable profit or loss, it is not accounted for.
Deferred tax is determined using tax rates that have been enacted or substantively enacted by the end of the reporting period and are expected to apply in the period when the related deferred tax asset is realised or the deferred tax liability is settled.
Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which deductible temporary differences and tax losses can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Corporate Social Responsibility (CSR)
Every Mauritian company is required to set up a CSR fund equivalent to 2% of its chargeable income of the preceding year and the Group should remit 75%
of the fund respectively to the Mauritian Tax Authorities. This practice is being interpreted and CSR is classified as taxation.
(a) There is a legally enforceable right to offset current tax assets against current tax liabilities and deferred tax assets and liabilities when the deferred taxes relate to the same fiscal authority on the same entity. The following amounts are shown in the statements of financial position.
At the end of the reporting period, a subsidiary of the Group had unused tax losses of Rs 16.3m (2020: Rs 22.8m), available for offset against future profits of that subsidiary. A deferred tax asset has been recognised in respect of Rs 16.3m (2020: Rs 22.8m) for such losses. The tax losses expire on a rolling basis over 5 years.
(b) The movement on the deferred tax liabilities is as follows:
(c) The movement in deferred tax assets and liabilities during the year without taking into consideration the offsetting of balances within the same fiscal
authority on the same entity is as follows: