PPS Integrated Report 2021 183 | Notes to the Consolidated Financial Statements 29.FINANCE COSTS Group 2021 2020 R’m R’m Interest expense on borrowings 0 14 Notional interest expense on lease liabilities 5 5 Total finance costs 5 19 30.TAX Group 2021 2020 R’m R’m Current income tax 287 123 – Current year tax 286 132 – Prior years underprovision / (overprovision) 1 (9) Dividend withholding tax on deemed dividends 105 99 392 222 Deferred tax 394 250 Total tax 786 472 Tax on the Group’s profit before tax differs from the theoretical amount that would arise using the tax rate applicable to South African/Namibian companies as follows: Profit before movement in policy liabilities 4 611 2 175 Tax calculated at domestic tax rates applicable to profits in South Africa/Namibia 1 324 626 Tax effect of income not subject to tax (2 494) (1 703) Tax effect of non-deductible expenses 1 887 1 503 Tax effect of tax rate on Dividend Withholding Tax on deemed dividends being different to tax rate on the individual policyholder fund (“IPF”) 53 50 Prior years underprovision / (overprovision) 1 (9) Tax effect of CF tax rate being different to IPF tax rate 15 5 Total tax per Statement of Profit or Loss and Other Comprehensive Income 786 472 The applicable tax rate was 28% (2020: 28%) for South African companies and 32% (2020: 32%) for Professional Provident Society Insurance Company (Namibia) Limited. Professional Provident Society Insurance Company Limited has five separate tax funds: the individual policyholders’ fund (taxed at 30%), the Company policyholders’ fund (taxed at 28%), the untaxed policyholder's fund (not taxed), the risk-policy fund (taxed at 28%) and the corporate fund (taxed at 28%). The tax reconciliation is done on total tax on all funds. The Professional Provident Society Holdings Trust is taxed at 45%. Dividend withholding tax is payable on dividends received in the individual policy fund. The Group has accumulated losses of R333.8 million (2020: R531.9 million) available in certain subsidiaries for offset against future taxable income in those subsidiaries.
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