Income tax in interim periods
For the purposes of interim
financial reporting, the Company
determines the appropriate income
tax provision by first applying
the effective
tax rate
expected to
be applicable
for the
full fiscal
year to
ordinary income.
This amount
is then
adjusted for
the tax
effect
of
significant
unusual
items,
for
instance,
changes
in
tax
law,
valuation
allowances
and
non-deductible
transaction-related
expenses that
are reported
separately,
and have an
impact on the
tax charge.
The cumulative effect
of any change
in the enacted
tax
rate, if and when applicable, on the opening balance of deferred tax assets
and liabilities is also included in the tax charge as a discrete
event in the interim period in which the enactment date occurs.
For the three and
nine months ended March 31,
2026, the Company’s effective tax rate was
impacted by the tax
expense recorded
by the Company’s
profitable South African
operations,
non-taxable income
(including the fair
value adjustment on
equity securities
and other
income) and non
-deductible and
expenses (including
certain impairment
losses and
transaction-related expenditures).
The
Company’s income tax expense was impacted by a higher deferred tax benefit as a result of the reduction in the useful lives of certain
of the
Company’s
brand and
trademark intangible
assets which
has resulted
in an
increase in
amortization expense
during the
nine
months ended March 31, 2026.
For the three and
nine months ended March 31,
2025, the Company’s effective tax rate was
impacted by the tax
expense recorded
by the Company’s
profitable South African operations, non-deductible
expenses (including transaction-related expenditures),
the on-
going losses
incurred by
certain of
the Company’s
South African
businesses, a
valuation allowance
created related
to the fair
value
adjustment to MobiKwik,
and the associated valuation
allowances created related
to the deferred tax
assets recognized regarding
net
operating losses incurred by these entities.
Uncertain tax positions
As of March 31, 2026 and June 30, 2025, the
Company had
no
unrecognized tax benefits. The Company files income tax returns
mainly in South Africa, Botswana, Namibia and in the U.S. federal jurisdiction. As of March 31, 2026, the Company’s South African
subsidiaries are no longer subject to income tax examination by the South African Revenue Service
for periods before June 30, 2020.
The
Company
is
subject
to
income
tax
in
other
jurisdictions
outside
South
Africa,
none
of
which
are
individually
material
to
its
financial position, statement of cash flows, or results of operations.