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Note 16 - Tax Expense
 12 Months Ended
Dec. 31, 2020
Statement Line Items [Line Items]  
Disclosure of income tax [text block]
16
Tax expense
 
    2020     2019     2018  
Tax recognised in profit or loss                        
                         
Current tax    
9,492
      
7,311
      
3,783
  
Income tax - current year    
8,969
      
6,802
      
2,523
  
Income tax - prior year (over)/ under provision    
(54
 )    
29
      
1,075
  
Withholding tax - current year    
577
      
480
      
580
  
Withholding tax - prior year overprovision    
-
      
-
      
(395
 )
                         
Deferred tax expense    
5,681
      
2,979
      
3,662
  
Origination and reversal of temporary differences    
5,681
      
2,979
      
3,662
  
                         
Tax expense – recognised in profit or loss    
15,173
      
10,290
      
7,445
  
                         
Tax recognised in other comprehensive income                        
Income tax - current year    
-
      
-
      
-
  
                         
Tax expense    
15,173
      
10,290
      
7,445
  
 
Unrecognised deferred tax assets
 
    2020     2019     2018  
                   
Eersteling Gold Mining Company Limited    
-
      
-
      
4,989
  
Caledonia Holdings Zimbabwe (Private) Limited    
593
      
421
      
-
  
Greenstone Management Services Holdings Limited    
376
      
276
      
191
  
Tax losses carried forward    
969
      
697
      
5,180
  
 
Taxable losses do
not
expire for the entities incurring taxable losses within the Group, unless the entities cease trading. Tax losses carried forward relate to Greenstone Management Services Holdings Limited (UK) and Caledonia Holdings Zimbabwe (Private) Limited. The unrecognised tax losses relating to the entity were transferred with the sale of the entity. 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   2020     2019     January 1, 2019  
                   
Net income tax payable at January 1    
(163
 )    
(1,538
 )    
(1,145
 )
Current tax expense    
(9,492
 )    
(7,311
 )    
(3,783
 )
Foreign currency movement    
2,580
      
3,169
      
46
  
Tax paid    
6,656
      
5,517
      
3,344
  
Net income tax payable at December 31    
(419
 )    
(163
 )    
(1,538
 )
 
Reconciliation of tax rate   2020     2019     2018  
                   
Profit for the year    
25,257
      
50,401
      
13,756
  
Total tax expense    
15,173
      
10,290
      
7,445
  
Profit before tax    
40,430
      
60,691
      
21,201
  
                         
Income tax at Company's domestic tax rate
(1)
    
-
      
-
      
-
  
Tax rate differences in foreign jurisdictions
(2)
    
12,405
      
16,232
      
6,465
  
Effect of income tax calculated in RTGS$ as required by PN26
(3)
    
2,004
      
(8,526
 )    
-
  
Management fee – withholding tax on deemed dividend portion    
209
      
224
      
337
  
Management fee – non-deductible deemed dividend    
570
      
652
      
579
  
Management fee – withholding tax - current year    
123
      
129
      
96
  
Management fee – non-deductible withholding tax - prior year    
-
      
-
      
(664
 )
Withholding tax on intercompany dividends    
245
      
128
      
110
  
Non-deductible expenditure                        
- Royalty expenses
(4)
    
-
      
933
      
882
  
- Donations    
107
      
18
      
14
  
- Other non-deductible expenditure    
177
      
21
      
123
  
Credit export incentive income exemption    
(598
 )    
(124
 )    
(1,649
 )
Change in income tax rate
(5)
    
(287
 )    
-
      
-
  
Change in tax estimates                        
 - Zimbabwean income tax    
-
      
29
      
795
  
 - South African income tax    
(54
 )    
63
      
220
  
 - Other    
-
      
-
      
61
  
Change in unrecognised deferred tax losses    
272
      
511
      
76
  
Tax expense - recognised in profit or loss    
15,173
      
10,290
      
7,445
  
 
 
(
1
)
The tax rate in Jersey, Channel Islands is
0%
(
2019:
0%,
2018:
0%
).
 
(
2
)
The effective tax rate of
37.52%
exceeds the statutory tax rates of subsidiaries of the Company, as certain expenditures are incurred by the Company that is
not
tax-deductible against taxable income in Zimbabwe and South Africa, where the enacted tax rates are
25.75%
and
28.00%
respectively. Further, Zimbabwean legislation requires the Blanket income taxation calculation to be performed in RTGS$ whereas the functional currency in which the profit before tax is calculated in these consolidated financial statements is in US Dollar; the requirement is further described in point
3
below.
 
(
3
)
In
2019
ZIMRA issued
PN26
that was affected retrospectively from
February 22, 2019.
The public notice provided clarity on Section
4
(a) of the Finance Act [Chapter
23.04]
of Zimbabwe, which requires a company earning taxable income to pay tax in the same or other specified currency in which taxable income and revenue is earned. PN
26
clarifies that the calculation of taxable income be performed in RTGS$ and that the payment of the tax be in the ratio of the currency that the taxable income and revenue is earned. The reconciling item reconciles the profit before tax calculated using US Dollars as the functional currency of the Zimbabwean entities to taxable income calculated in RTGS$.
 
(
4
)
On
August 1, 2019
the Zimbabwean Government announced in the mid-term budget speech that mining royalties will be deductible for income tax purposes. The change came into effect on
January 1, 2020.
 
(
5
)
On
November 26, 2020
the Zimbabwean Government announced in the
2021
National Budget Statement that the income tax rate will be reduced from
25.75%
to
24.72%
and will take effect in the
2021
fiscal tax year. This resulted in a change in the estimated deferred tax liability.
 
Recognised deferred tax assets and liabilities
 
    Assets     Liabilities     Net  
    2020     2019     2020     2019     2020     2019  
                                     
Property, plant and equipment    
-
      
-
      
(5,409
 )    
(4,195
 )    
(5,409
 )    
(4,195
 )
Allowance for obsolete stock    
13
      
22
      
-
      
-
      
13
      
22
  
Prepayments    
-
      
-
      
(3
 )    
(4
 )    
(3
 )    
(4
 )
Unrealised foreign exchange    
530
      
309
      
-
      
-
      
530
      
309
  
Trade and other payables    
636
      
739
      
-
      
-
      
636
      
739
  
Cash-settled share-based payments    
8
      
5
      
-
      
-
      
8
      
5
  
Provisions    
60
      
58
      
-
      
-
      
60
      
58
  
Other    
18
      
-
      
-
      
-
      
18
      
-
  
Tax assets/ (liabilities)    
1,265
      
1,133
      
(5,412
 )    
(4,199
 )    
(4,147
 )    
(3,066
 )
 
*
The deferred tax liability consists of a deferred tax asset of
$87
(
2019:
$63,
January 1, 2019:
$98
) from the South African operation and a net deferred tax liability of
$4,234
(
2019:
$3,129,
January 1, 2019:
$23,328
) 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 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,
2020		     Recognised
in profit or
loss		     Foreign
exchange
movement		     Balance
December 31,
2020		  
                         
Property, plant and equipment    
(4,195
 )    
(7,195
 )    
5,981
      
(5,409
 )
Allowance for obsolete stock    
22
      
14
      
(23
 )    
13
  
Prepayments    
(4
 )    
-
      
1
      
(3
 )
Unrealised foreign exchange    
309
      
732
      
(511
 )    
530
  
Trade and other payables    
739
      
674
      
(774
 )    
639
  
Cash-settled share-based payments    
5
      
3
      
-
      
8
  
Provisions    
58
      
76
      
(74
 )    
60
  
Other    
-
      
15
      
-
      
15
  
Tax (liabilities)/ assets    
(3,066
 )    
(5,681
 )    
4,600
      
(4,147
 )
 
    Balance
January 1,
2019		     Recognised
in profit or
loss		     Foreign
exchange
movement		     Balance
December 31,
2019		  
                         
Property, plant and equipment    
(24,930
 )    
(4,561
 )    
25,296
      
(4,195
 )
Allowance for obsolete stock    
258
      
11
      
(247
 )    
22
  
Prepayments    
(3
 )    
-
      
(1
 )    
(4
 )
Unrealised foreign exchange    
34
      
519
      
(244
 )    
309
  
Trade and other payables    
486
      
1,093
      
(840
 )    
739
  
Cash-settled share-based payments    
13
      
(9
 )    
1
      
5
  
Provisions    
852
      
11
      
(805
 )    
58
  
Other    
60
      
(43
 )    
(17
 )    
-
  
Tax (liabilities)/ assets    
(23,230
 )    
(2,979
 )    
23,143
      
(3,066
 )