Notes to the consolidated annual financial statements | Note 7

7. Taxation
7.1 Income tax expense
 
Rm     2018    2017     
South African current tax      (5 182)   (5000)    
   Current year      (5 174)   (5176)    
   Adjustments in respect of prior years      (8)   176     
Foreign current tax      (1 204)   (827)    
   Current year      (820)   (483)    
   Adjustments in respect of prior years      (2)   (143)    
   Withholding tax      (382)   (201)    
   Current year      (386)   (192)    
   Adjustments in respect of prior years      4    (9)    
Total current tax      (6 386)   (5827)    
Deferred tax on origination and reversal of temporary differences:                
South African deferred tax      (124)   (264)    
   Current year      (142)   (93)    
   Adjustments in respect of prior years      18    (171)    
Foreign deferred tax      (21)   (11)    
   Current year      (58)   113     
   Adjustments in respect of prior years     37    (124)    
Total deferred tax      (145)   (275)    
Total income tax expense      (6 531)   (6102)    
Components of deferred tax charged to profit or loss                
Capital allowances      27    (325)    
Foreign exchange      (65)   102     
Tax losses      78    169     
Provisions and deferred income      (65)   (85)    
Other      (120)   (136)    
      (145)   (275)    
Factors affecting tax expense for the year                
The table below discloses the differences between the expected income tax expense at the South African statutory tax rate and the Group’s total income tax expense:                
Expected income tax expense on profit before tax at the South African statutory tax rate      (6 186)   (5384)    
Adjusted for:                
Non-deductible operating expenditure      (198)   (119)    
Non-deductible finance costs      (86)   (33)    
Non-deductible depreciation and amortisation      (23)   (25)    
Net unrecognised tax asset      (254)   (171)    
Irrecoverable foreign taxes      (425)   (124)    
Effect of taxation of associate and joint venture reported within operating profit      422    –     
Minimum alternative taxes      (65)   (58)    
Adjustments in respect of prior years      50    (271)    
Effect of different statutory tax rates of jurisdictions other than South Africa      96    80     
Non-taxable income      138    3     
Total income tax expense      (6 531)   (6102)    

The South African statutory tax rate is 28.0% for all reporting periods. The Group’s effective tax rate is 29.6% (2017: 31.7%).
7.2 Other comprehensive income, net of tax
 
Rm     2018    2017     
Foreign currency translation differences, net of tax     (5 867)   (1 633)    
Foreign currency translation differences     (5 990)   (1 737)    
Taxation     123    104     
Other comprehensive income, net of tax     (5 867)   (1 633)    
7.3 Tax charged directly to other comprehensive income
 
Rm     2018   2017    
Current tax     –   8    
Deferred tax     123   96    
      123   104    
7.4 Deferred tax
 
Rm     2018    2017     
Analysed in the statement of financial position, after offset of balances within companies, as follows:              
  Deferred tax assets     279    199     
  Deferred tax liabilities     (2 693)   (2 635)    
      (2 414)   (2 436)    
Components              
Gross deferred tax assets and liabilities, before offset of balances within companies, are as follows:              
Capital allowances      (3 353)   (3 447)    
   Deferred tax assets      8    –     
   Deferred tax liabilities      (3 361)   (3 447)    
Foreign exchange      (260)   (293)    
   Deferred tax assets      30    93     
   Deferred tax liabilities      (290)   (386)    
Tax losses      249    174     
   Deferred tax assets      249    174     
Provisions and deferred income      1 075    1169     
   Deferred tax assets      1 075    1169     
Other      (125)   (39)    
   Deferred tax assets      28    12     
   Deferred tax liabilities     (153)   (51)    
      (2 414)   (2 436)    
Reconciliation of net deferred tax balance                
1 April      (2 436)   (2 247)    
   Foreign currency translation differences      44    91     
   Charged to profit or loss      (145)   (275)    
   Charged directly to other comprehensive income      123    96     
   Charged directly to equity      –    (54)    
   Business combinations and disposal of subsidiaries      –    (47)    
31 March      (2 414)   (2 436)    
7.5 Factors affecting the tax charge in future years
 
Rm     2018    2017     
Total estimated tax losses     4 864    4 189     
Utilised to reduce net temporary differences     (861)   (588)    
Estimated unused tax losses     4 003    3 601     

If the estimated unused tax losses are applied, the available R1 161 million (2017: R1 155 million) would result in the current year’s R2 414 million net deferred tax liability reducing to R1 253 million (2017: R2 436 million net deferred tax liability reducing to R1 282 million), if sufficient future taxable profits will be available against which the unused tax losses can be utilised.

The gross amounts and expiry dates of deductible temporary differences, estimated unused tax losses and unused tax credits, for which no deferred tax asset is recognised, are as follows:

Rm     Unlimited   Total    
2018
              
Deductible temporary differences     5 329   5 329    
Estimated unused tax losses     4 003   4 003    
2017
              
Deductible temporary differences     5 396   5 396    
Estimated unused tax losses     3 601   3 601    

Notes to the consolidated annual financial statements | Note 7