79
Straco Corporation Limited • Annual Report 2014
NOTES TO THE FINANCIAL STATEMENTS
21
Tax expense (cont’d)
Group
2014
2013
$
$
Reconciliation of effective tax rate
Profit before income tax
57,640,983
50,269,812
Income tax at 17% (2013: 17%)
9,798,967
8,545,868
Effect of different tax rate in foreign jurisdiction
5,112,392
4,139,108
Expenses not deductible for tax purposes
899,243
438,176
Deferred tax benefits not recognised
399,289
12,713
Tax exempt revenue
–
(140,495)
Underprovision in prior years
30,223
68,915
Withholding tax
2,096,492
1,734,506
Others
51,630
76,741
18,388,236
14,875,532
Source of estimation uncertainty
In determining the amount of current and deferred tax, the Group takes into account the impact of uncertain tax positions and whether additional
taxes and interest may be due. The Group believes that its accruals for tax liabilities are adequate for all open tax years based on its assessment of
many factors, including interpretations of tax law and prior experience. This assessment relies on estimates and assumptions and may involve a series
of judgements about future events. New information may become available that causes the Group to change its judgement regarding the adequacy of
existing tax liabilities; such changes to tax liabilities will impact tax expense in the period that such a determination is made.
