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Income Taxes

12 Months Ended

Dec. 31, 2021

12	INCOME TAX

The major components of income tax expense for the years ended December 31, 2021 and 2020 are:

	2021			2020
	USD			USD
Consolidated statement of comprehensive income
Current income tax:
Current income tax charge		343,275			481,730

Deferred income tax
Relating to origination and reversal of temporary differences		(3,272	)		19,508
Income tax expense reported in the consolidated statement of comprehensive income		340,003			501,238

Reconciliation of tax expense and the accounting profit multiplied by the Group’s tax rate for 2021 and 2020:

	2021			2020
	USD			USD

Accounting loss before tax		(17,710,304	)		(5,241,952	)
Expected tax charge/(credit) at the statutory tax rate of 0% in Cayman Islands		-			-
Effect of different tax rates of subsidiaries operating in other jurisdictions		(616,272	)		103,299
Effect of expenses that are not deductible in determining taxable profit		37,225			21,144
Unrecognized tax losses during the year		614,932			-
Withholding tax expenses incurred on revenue from foreign jurisdictions		311,042			372,226
Others		(6,924	)		4,569
At the effective income tax rate of -1.92% % (2020: -9.56%)		340,003			501,238

Deferred tax asset relates to the following:

	Consolidated statement of financial position						Consolidated statement of comprehensive income
	2021			2020			2021			2020
	USD			USD			USD			USD

Provisions	-			-			-			7,564
Accelerated depreciation for tax purposes	(14,625		)	(17,898		)	(3,272		)	-
Losses available for offsetting against future taxable income		-			-			-			11,944
Deferred tax expense / (benefit)											19,508
Deferred tax (liabilities) / assets		(14,625	)		(17,898	)		(3,272	)

Based on the latest available forecast of future profits, the Group has determined USD nil of tax losses (2020: nil) are unlikely to be utilized in the foreseeable future.

The Group’s exposure to taxes stems from:

(1)	Anghami KSA: established in the Kingdom of Saudi Arabia and is subject to 5% withholding tax and 20% corporate income tax;

(2)

Anghami for Digital Content (ADC): established in Egypt and is subject to 20% withholding tax and 22.5% corporate income; and

(3)

Digi Music SAL (Offshore): established in Lebanon and is subject to 7.5% withholding tax.

The majority of withholding tax (WHT) incurred on distributions from foreign jurisdiction are comprised of distributions made from subsidiary entities (mainly Anghami KSA and ADC) to the Company. In addition, WHT include taxes paid by the Group for income generated from Telco partners. These Telco partners operate in countries where the Group does not have an operating entity and has service agreements with Telco companies. The tax on services performed by non-resident company is deducted from the Group’s payments received from the Telco partners based on WHT rates for the respective countries which are established as part of the existing WHT regimes for each country.