Notes to the Company annual financial statements | Note 18

18. INCOME TAX
  Accounting policy
 

The income tax expense or credit for the period is the tax payable on the current period's taxable income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

Current and deferred taxes are recognised as income or an expense and included in profit or loss for the period, except to the extent that the tax arises from:

  • a transaction or event which is recognised, in the same or different period, to other comprehensive income; or
  • a business combination.
Critical accounting estimates and assumptions

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. To the extent that future cash flows and taxable income differ significantly from estimates, the ability of BLT to realise net deferred tax assets recorded at the end of the reporting period could be impacted.

The Directors resolved at the end of the prior and current financial year not to recognise the deferred tax asset.

No income tax charge/(credit) was recognised in the current or prior year.

   2023 
R'000 		 2022 
R'000 
Reconciliation between (loss)/profit and tax charge       
(Loss)/profit before taxation  (252 843) 228 057 
Tax at the applicable tax rate of 27% (2022: 28%) (68 268) 63 856 
Tax effect of adjustments on taxable (loss)/income       
Dividends received not taxable  (8 526) (28 131)
Fair value adjustment on derivative liability  (5 940) (12 930)
Gain on receipt of contingent consideration  —  (12 831)
ECL movement on financial assets and financial guarantees  84 145  (11 173)
Expenditure not deductible for tax purposes  (2 032) 546 
Tax effect of losses not recognised  621  663 
   —  — 

No provision has been made for current tax as BLT has no taxable income. The estimated tax loss available for set off against future taxable income is R180 943 377 (2022: R177 523 529). In the current year, the new corporate tax rate of 27% (2021: 28%) became effective for the financial year ending 31 May 2023. This change will have no impact on BLT.