7. TAXATION
7.1 Income tax expense
 

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at year-end in the countries where the Company's subsidiaries, associates and joint ventures operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity respectively.

Uncertain tax positions are considered by the Group at the level of the individual uncertainty or group of related uncertainties.

Critical accounting estimates and assumptions

There are transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. Amounts accrued are based on management's interpretation of country-specific tax law and the likelihood of settlement. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current income tax and deferred tax provisions in the period in which such determination is made.

Deferred tax assets are recognised to the extent that it is probable that taxable income will be available in the future against which these can be utilised. Future taxable income is estimated based on business plans which include estimates and assumptions regarding economic growth, interest rates, inflation and competitive forces.

   2020 
Rí000 
   2020 
Rí000 
  
Current tax  313 000     339 670    
Current year  312 991     339 894    
Adjustment in respect of prior years     (224)   
Deferred tax  (8 146)    (24 548)   
Current year  (8 914)    (31 542)   
Adjustment in respect of prior years  768     6 994    
Withholding tax  (5 612)   —    
Income tax expense  299 242     315 122    
Total taxation is attributable to: 
Profit from continuing operations  219 752     278 449    
Profit from discontinued operations  79 490     36 673    
299 242     315 122    

 

  2020 2019
  R’000  R’000 
Profit/(loss) from continuing operations before tax  500 835  (6 384 164)
Profit from discontinued operations before tax  17 514  77 090 
Profit/(loss) before tax  518 349  (6 307 074)
Tax at 28%  145 138  28.0    (1 765 981) 28.0   
Loss on liquidity support not deductible  13 634  2.6    41 728  (0.7)  
Expenditure of a capital nature  5 935  1.1    5 025  (0.1)  
Financial guarantee contracts  —  —    27 850  (0.4)  
Recycling of foreign currency translation reserve on sale of subsidiary (refer to note 11) (14 990) (2.9)   —  —   
Impairment of goodwill  59 804  11.6    34 832  (0.6)  
Impairment of loan to joint venture (refer to note 2.1) —  —    45 233  (0.7)  
Impairment of investment in associate and joint venture (refer to note 2.1) —  —    714 186  (11.3)  
Loan written off  49 791  9.6    —  —   
Derecognition of put option liability on disposal of VAS operations (refer to note 11) (60 077) (11.6)   —  —   
Recognition of derivative liability  21 707  4.2    —  —   
Fair value adjustments to loans receivable  21 186  4.1    —  —   
Fair value adjustments to discontinued operations  27 669  5.4    —  —   
Surety loan fair value adjustment  (5 551) (1.1)   (8 399) 0.1   
Other income not subject to tax  (25 895) (5.0)   (27 845) 0.4   
Other expenses not deductible for tax purposes  61 417  11.9    73 674  (1.2)  
Capital gains tax  8 291  1.6    16 896  (0.3)  
Tax effect of assessed losses not recognised  2 627  0.5    122 919  (1.9)  
Utilisation of previously unrecognised assessed losses  (1 955) (0.4)   (460) 0.0   
Share of losses/(profits) from associates and joint ventures (refer to note 2.1) (3 819) (0.7)   1 036 395  (16.4)  
Adjustment in respect of prior years  777  0.1    6 770  (0.1)  
Effect of different tax dispensations  (835) (0.2)   (8 813) 0.1   
Withholding tax  (5 612) (1.1)   1 112  (0.0)  
Tax charge  299 242  57.7    315 122  (5.0)  
Effective tax rate (%) 58%  (5%)