Tax expense

	2018			2017		2016
Tax recognised in profit or loss

Current tax		3,783			4,995		3,106
Income tax– current year		2,523			3,702		2,414
Income tax – Prior year under provision		1,075			71		49
Withholding tax expense – current year		580			1,222		643
Withholding tax expense – Prior year over provision		(395	)		—		—
Deferred tax expense		3,662			3,696		4,611
Origination and reversal of temporary differences		3,662			3,696		4,611

Tax expense – recognised in profit or loss		7,445			8,691		7,717

Tax recognised in other comprehensive income

Income tax - current year			—				—				—
Tax expense			7,445				8,691				7,717

Unrecognised deferred tax assets

	2018		2017		2016

Eersteling Gold Mining Company Limited		4,989		4,989		4,989
Greenstone Management Services Holdings Limited		191		116		—
Tax losses carried forward		5,180		5,105		4,989

Taxable losses do

not

expire for the entities incurring taxable losses within the Group. Tax losses carried forward relate to Greenstone Management Services Holdings Limited (UK) and Eersteling Gold Mining Company Limited. Deferred tax assets have

not

been recognised in these entities as future taxable income is

not

deemed probable to utilise these losses against.

Tax paid	2018			2017			2016

Net income tax (payable)/receivable at January 1		(1,145	)		(345	)		344
Current tax expense		(3,783	)		(4,995	)		(3,106	)
Foreign currency movement		46			(17	)		(49	)
Tax paid		3,344			4,212			2,466
Net income tax payable at December 31		(1,538	)		(1,145	)		(345	)

Reconciliation of tax rate

	2018			2017			2016
Profit for the year		13,756			11,896			11,085
Total tax expense		7,445			8,691			7,717
Profit before tax		21,201			20,587			18,802

Income tax at Company's domestic tax rate (1)		—			—			—
Tax rate differences in foreign jurisdictions (2)		6,465			6,546			6,293
Management fee – Withholding tax on deemed dividend portion (3)		337			538			—
Management fee – non-deductible deemed dividend (3)		579			925			—
Management fee – non-deductible withholding tax current year (4)		96			427			427
Management fee – non-deductible withholding tax prior year (5)		(664	)		—			—
Withholding tax on intercompany dividend		110			90			49
Non-deductible royalty expenses		882			901			753
Other non-deductible expenditure		137			107			64
Export incentive income credit 2016		—			(284	)		—
Export incentive income exemption (6)		(1,649	)		(630	)		—
Change in tax estimates
- Zimbabwean income tax (7)		795			—			—
- South African income tax (8)		220			—			—
- Other		61			(45	)		49
Change in unrecognised deferred tax assets		76			116			82
Tax expense - recognised in profit or loss		7,445			8,691			7,717

(

) Enacted tax rate in Jersey, Channel Islands is

(

2017:

0%;

2016:

)

(

) Subsidiaries registered in Zimbabwe and South Africa are subject to a corporate tax rate of

25,75%

and

28%

respectively.

(

) Zimbabwean tax legislation changed during

2017

that gave rise to an additional withholding tax of

15%

(

2017:15%

) on a portion of the intercompany management fee considered to be a deemed dividend. The new legislation resulted in this portion of the management fee being

not

deductible for income tax purposes in Zimbabwe from

January 1, 2018.

(

)

(

2017:

15%;

2016:

15%

) withholding tax is charged on the management fee by the Zimbabwean revenue authority (“ZIMRA”). The management fee withholding tax is deducted from the taxable income

not

the income tax liability in the South African subsidiary, resulting in a portion

not

deducted from the South African income tax liability.

(

) Withholding tax on the management fee was provided for and paid at

15%

2017.

However, in the

second

quarter of

2018

management obtained confirmation from the ZIMRA that the withholding tax rate was reduced to

from

February 1, 2017.

The ZIMRA allowed an amount of

$395

to be offset against outstanding income tax liabilities in Zimbabwe. The overpayment of withholding taxes on the management fee also resulted in a change of estimate reducing the

2017

non-deductible withholding tax in the South African subsidiary amounting to

$269,

estimated at

15%,

5%.

The change in estimate was accounted for prospectively in the

2018

year.

(

) On

March 23, 2018,

the ZIMRA enacted a new finance act that provided for the export credit incentive to be tax exempt. The

2018

finance bill indicated that the export incentive income will be tax exempt from

June 1, 2017.

The new finance bill resulted in an income tax credit being applied in the

2018

income tax calculation giving rise to a credit for the export incentive income of

2017.

(

) During the

second

quarter of

2018

management revised its estimated management fee fair value previously deducted against taxable income in the prior years. Management approached ZIMRA, and reached a settlement on the amount allowed as a deduction.

penalties or interests were incurred.

(

) Late

2015,

the South African subsidiary, Caledonia Mining South Africa Proprietary Limited, concluded a Voluntary Disclosure Permission (“VDP”) agreement with the South African Revenue Services (“SARS”) for tax years before

2014.

Subsequent income tax assessments from SARS, received during quarter

2018,

indicated that a payment previously reported as a reduction of the income tax liability for tax years after concluding the VDP agreement pertained to the

2013

tax year. This resulted in an increase to the income tax liability estimate of

$220,

as at

December 31, 2018.

Recognised deferred tax assets and liabilities

Deferred tax assets and liabilities are attributable to the following:

	Assets				Liabilities						Net
	2018		2017		2018			2017			* 2018			*2017

Property, plant and equipment		—		—		(24,930	)		(20,985	)		(24,930	)		(20,985	)
Allowance for obsolete stock		258		35		—			—			258			35
Prepayments		—		—		(3	)		(4	)		(3	)		(4	)
Unrealised foreign exchange		34		97		—			—			34			97
Share based payments		13		12		—			—			13			12
Provisions		1,386		1,290		—			—			1,386			1,290
Other		12		—		—			—			12			—
Tax assets/ (liabilities)		1,703		1,434		(24,933	)		(20,989	)		(23,230	)		(19,555	)

The deferred tax liability consists of a deferred tax asset of

$98

(

2017:

$65

) from the South African operation and a net deferred tax liability of

$23,328

(

2017:

$19,620

) due to the Zimbabwean operation. The amounts are in different tax jurisdictions and cannot be offset. The amounts are presented as part of Non-current assets and a Non-current liabilities in the Statements of financial position. The deferred tax asset recognised is supported by evidence of probable future taxable income.

Movement in recognised deferred tax assets and liabilities

	Balance January 1, 2018			Recognised in profit or loss			Foreign exchange movement			Balance December 31, 2018
Property, plant and equipment		(20,985	)		(3,945	)		—			(24,930	)
Allowance for obsolete stock		35			223			—			258
Prepayments		(4	)		—			1			(3	)
Unrealised foreign exchange		97			(63	)		—			34
Share based payments		12			3			(2	)		13
Provisions		1,290			104			(8	)		1,386
Other		—			16			(4	)		12
Total		(19,555	)		(3,662	)		(13	)		(23,230	)

	Balance January 1, 2017			Recognised in profit or loss			Foreign exchange movement		Balance December 31, 2017
Property, plant and equipment		(17,092	)		(3,893	)		—		(20,985	)
Allowance for obsolete stock		12			23			—		35
Prepayments		(3	)		(1	)		—		(4	)
Unrealised foreign exchange		—			97			—		97
Share based payments		—			12			—		12
Provisions		1,218			66			6		1,290
Total		(15,865	)		(3,696	)		6		(19,555	)