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Note 16 - Tax Expense

12 Months Ended

Dec. 31, 2023

16	Tax expense

	2023		2022			2021
Tax recognised in profit or loss

Current tax		7,642		9,932			9,051
Income tax - current year		4,821		8,707			8,769
Income tax - change in tax estimate		1,944		(46	)		(168	)
Withholding tax - current year		867		1,271			450
Acquisition of Bilboes Gold tax liability (note 5)		10		-			-

Deferred tax expense		5,168		6,838			5,806
Origination and reversal of temporary differences		5,168		6,838			5,806

Tax expense – recognised in profit or loss		12,810		16,770			14,857

Tax recognised in other comprehensive income
Income tax - current year		-		-			-

Tax expense		12,810		16,770			14,857

16	Tax expense (continued)

Unrecognised deferred tax assets

	2023	2022	2021

Bilboes Holdings (Private) Limited^*	4,447	-	-
Caledonia Holdings Zimbabwe (Private) Limited – mining	2,942	-	-
Caledonia Holdings Zimbabwe (Private) Limited - services	1,805	1,805	1,205
Blanket Employee Trust Services (Private) Limited	260	227	130
Caledonia Mining Services (Private) Limited	-	69	5
Greenstone Management Services (Pty) Ltd (UK)^@	144	176	139
Tax losses carried forward	9,598	2,277	1,479

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 Caledonia Holdings Zimbabwe (Private) Limited and Bilboes Holdings (Private) Limited. Deferred tax assets have not been recognised in these entities as future taxable income is not deemed probable to utilise these losses against.

^*	Assessed losses of Bilboes of $3,763 was acquired during 2023.
^@	Assessed losses of Greenstone Management Services (Pty) Ltd (UK) are not carried over and reset to zero each year.

Tax paid	2023		2022		2021

Net income tax payable at January 1	(1,284	)	(1,461	)	(419	)
Current tax expense	(7,642	)	(9,932	)	(9,051	)
Acquisition of Bilboes Gold tax liability (note 5)	(10	)	–		–
Foreign currency movement	840		3,243		583
Tax paid	9,206		6,866		7,426
Net income tax receivable/ (payable) at December 31	1,110		(1,284	)	(1,461	)

16	Tax expense (continued)

Reconciliation of tax rate

Profit for the year	(618	)	22,866		23,142
Total tax expense	12,810		16,770		14,857
Profit before tax	12,192		39,636		37,999

Income tax at Company's domestic tax rate ⁽¹⁾	-		-		-
Tax rate differences in foreign jurisdictions ⁽²⁾	5,808		12,600		11,847
Effect of income tax calculated in RTGS$ as required by PN26 ⁽³⁾	-		713		590
Management fee – withholding tax on deemed dividend portion	398		247		342
Management fee – non-deductible deemed dividend	675		735		611
Management fee – withholding tax - current year	169		174		148
Withholding tax on intercompany dividends	300		850		-
Non-deductible expenditure
- Donations	318		269		311
- Other non-deductible expenditure	37		1,613		904
Unrealised foreign exchange gains	(642	)	(1,322	)	(614	)
Change in tax estimates
- Zimbabwean income tax	1,891		-		(166	)
- South African income tax	53		(46	)	(2	)
Change in unrecognised tax losses	3,803		937		886
Tax expense - recognised in profit or loss	12,810		16,770		14,857

⁽¹⁾	The tax rate in Jersey, Channel Islands is 0% (2022: 0%, 2021: 0%).
⁽²⁾	The effective tax rate of 105.07% (2022: 42.31%) exceeds the statutory tax rates of subsidiaries of the Company, as certain expenditures are incurred by the Company that are not tax-deductible against taxable income in Zimbabwe and South Africa, where the enacted tax rates are 24.72% (2022: 24.72%) and 27.00% (2022: 28%) respectively.
⁽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 required 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 reconciled the profit before tax calculated using US Dollars as the functional currency of the Zimbabwean entities to taxable income calculated in RTGS$. PN26 was superseded by Section 37AA of the Income Tax Act [Chapter 23:06] of Zimbabwe, which requires taxpayers to submit separate tax returns where any part of the income from trade or investment is earned in foreign currency. Section 37AA stated that the calculation of taxable income be expressed in foreign currency and RTGS$ and that the payment of the tax payable be made proportionately to reflect the percentage share of income earned in all foreign currencies and the percentage earned in Zimbabwe dollars. The section further provides that the RTGS$ should be converted to US$ using the average auction rate of exchange for the year of assessment, with the same being applicable to US$ amounts that need to be converted to RTGS$.

On November 30,2023, the Zimbabwean Government announced in the 2024 National Budget Statement that the income tax rate will increase from 24.72% to 25.75% with effect from January 1, 2024. This was gazetted into law on December 30, 2023.

The South African Government announced in the 2021 National Budget Statement that the income tax rate will be reduced from 28.00% to 27.00% for the years of assessment ending on and after March 31, 2023. This resulted in a change in the estimated deferred tax asset.

16	Tax expense (continued)

Recognised deferred tax assets and liabilities

	Assets			Liabilities				Net
	2023	2022		2023		2022		2023		2022
Property, plant and equipment	-	-		(6,348	)	(6,323	)	(6,348	)	(6,323	)
Exploration and evaluation assets	-	-		(146	)	(2	)	(146	)	(2	)
Inventories – obsolete stock	65	(163	)	-		-		65		(163	)
Prepayments	-	-		(9	)	(5	)	(9	)	(5	)
Unrealised foreign exchange	-	733		-		-		-		733
Trade and other payables	190	814		-		-		190		814
Provisions	204	25		-		-		204		25
Other	66	-		-		-		66		-
Tax assets/ (liabilities)	525	1,409		(6,503	)	(6,330	)	(5,978	)*	(4,921	)*

The net deferred tax liability consists of a deferred tax asset of $153 (2022: $202) from the South African operation and a net deferred tax liability of $6,131 (2022: $5,123) 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, 2023		Recognised in profit or loss		Foreign exchange movement		Balance December 31, 2023
Property, plant and equipment	(6,323	)	(5,737	)	5,712		(6,348	)
Exploration and evaluation assets	(2	)	-		(144	)	(146	)
Inventories – obsolete stock	(163	)	90		138		65
Prepayments	(5	)	(5	)	1		(9	)
Unrealised foreign exchange	733		-		(733	)	-
Trade and other payables	814		(111	)	(513	)	190
Provisions	25		529		(350	)	204
Other	-		66		-		66
Tax (liabilities)/ assets	(4,921	)	(5,168	)	4,111		(5,978	)

	Balance January 1, 2022		Recognised in profit or loss		Foreign exchange movement		Balance December 31, 2022
Property, plant and equipment	(9,328	)	(8,560	)	11,565		(6,323	)
Exploration and evaluation assets	(47	)	10		35		(2	)
Inventories - obsolete stock	3		(295	)	129		(163	)
Prepayments	(10	)	4		1		(5	)
Unrealised foreign exchange	499		1,179		(945	)	733
Trade and other payables	989		794		(969	)	814
Provisions	54		30		(59	)	25
Tax (liabilities)/ assets	(7,840	)	(6,838	)	9,757		(4,921	)