Integrated Report 2021
Exxaro Resources Limited
Tax report 2021
| 2021 (Rm) |
2020 (Rm) |
|||
| Payments to government (taxation contribution) | 2 933 | 1 947 | ||
|---|---|---|---|---|
| Direct taxes per country | 1 308 | 953 | ||
| South Africa | 1 289 | 938 | ||
| Switzerland | 19 | 15 | ||
| Indirect taxes | 787 | 326 | ||
| VAT | 775 | 312 | ||
| Levied on purchases of goods and services | (3 094) | (3 379) | ||
| Charged on turnover | 3 869 | 3 691 | ||
| Dividend withholding tax – local | 1 | – | ||
| Dividend withholding tax – Switzerland | 11 | 13 | ||
| Securities transfer tax | – | 1 | ||
| Levies paid to government | 838 | 668 | ||
| Rates and taxes | 25 | 21 | ||
| Mineral and petroleum resources royalty | 733 | 590 | ||
| Workmen's Compensation Fund | 15 | 17 | ||
| Unemployment Insurance Fund | 14 | 12 | ||
| Carbon tax | 2 | 1 | ||
| Skills development levy | 49 | 27 | ||
| 2021 (Rm) |
2020 (Rm) |
|||
| Additional amounts collected by the group on behalf of government | 1 404 | 1 235 | ||
|---|---|---|---|---|
| Unemployment Insurance Fund | 14 | 12 | ||
| Pay as you earn (PAYE) tax deducted from remuneration paid | 1 390 | 1 223 | ||
Total tax contribution paid (%)
Exxaro's effective tax rate is calculated as a percentage excluding discontinued operations. The difference in the standard rate of 28% is explained below.
| 2021 | 2020 | |||
| Total (%) |
Excluding discontinued operations (%) |
Total (%) |
Excluding discontinued operations (%) |
|
| Standard tax rate | 28.0 | 28.0 | 28.0 | 28.0 |
|---|---|---|---|---|
| Capital losses/(gains)1 | 0.9 | 1.0 | (2.1) | (2.1) |
| Exempt income2 | (0.1) | (0.1) | (2.6) | (2.5) |
| Equity-accounted investment income3 | (14.5) | (16.4) | (18.1) | (18.1) |
| Prior year adjustments | (0.1) | (0.1) | ||
| Withholding taxes | 0.1 | 0.1 | ||
| Non-deductible expenditure4 | (0.7) | 0.7 | 3.5 | 3.6 |
| Remeasurement of foreign tax rates | (0.2) | (0.2) | (0.3) | (0.3) |
| (Reinstatement)/derecognition of deferred tax assets5 | – | – | (1.8) | (1.8) |
| Imputed income from controlled foreign companies | 0.3 | 0.3 | 0.5 | 0.5 |
| Effective tax rate | 13.6 | 13.2 | 7.2 | 7.4 |
| 1 | Capital disposals for the current year included: | |
| a. | A deemed capital gain on the intercompany sale and purchase of the RBCT shares between Exxaro Coal (purchaser) and Exxaro Coal Central (Pty) Ltd (seller) in 2017 as a result of the de-grouping corporate tax rule triggered by the ECC group leaving the Exxaro group of companies. | |
| 2. | Exxaro Resources Ltd.'s ("ERL") loss on the sale of shares in Exxaro Coal Central (Pty) Ltd ("ECC"). A portion of the loss was utilised against the capital gains realised on the sale of the Tronox SA investment. | |
| 3. | Gain on the restructuring of the Chifeng investment and the de-registration of Exxaro International BV and Exxaro Basemetals International BV | |
| 4. | Capital gain on the sale of shares in Tronox SA. The gain was offset against capital losses available from prior years as well as the loss incurred on the sale of the ECC investment (classified as discontinued operations) | |
| 5. | Capital gain on the sale of Tronox Holdings PLC- the gain was exempt in terms of par 64B of the Eight Schedule to the Income Tax Act. (Classified as discontinued operations) | |
| 6. | Sale of ADX | |
| 2 | Comprises dividends received by mainly the Exxaro ESOP Trust and the Exxaro Community NPC | |
| 3 | Mainly relates to equity-accounted investment income from Sishen Iron Ore Company Proprietary Limited (SIOC), a subsidiary of Kumba Iron Ore Limited (Kumba Iron Ore). | |
| Note: The prior-year effect of equity-accounted investment income on the tax rate for operations excluding discontinued operations has changed from a reduction of 18.2% (reported in the prior year) to a reduction of 18.1% on the tax rate This change is due to a restatement of discontinued operations in the prior year. Please refer to note 19.1 in the Group Financial statements. | ||
| 4 | Expenses not deductible for tax purposes mainly included: | |
| a. | Rehabilitation fund assets acquired by Exxaro Coal and Exxaro Coal Mpumalanga from ERL. ERL received the rehabilitation funds as part of the divestment of the ECC operations. A deferred tax liability has been raised on the acquired rehabilitation fund assets. | |
| 2. | Professional fees (Consulting and legal), ESD grants as well as SARS penalties and interest on diesel rebate claims disallowed. | |
| 3. | Distribution to beneficiaries of Exxaro ESOP trust | |
| These expenses have been partly offset by: | ||
| a. | Long-term incentive plan payments claimed | |
| 2. | The realisation of foreign currency translation reserve on the deregistration of Exxaro International BV and Exxaro Basemetals International BV. | |
| 5 | In the prior year, a deferred tax asset has been recognised on assessed capital losses from Exxaro Resources in anticipation of the sale of Tronox investments. This asset has been realised in the current year. | |
Reconciliation of tax accrual to cash tax paid (Rm)
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