Vodacom Integrated Report 2017

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46 Vodacom Group Limited Integrated report for the year ended 31 March 2017
Tax and our total economic contribution
As a responsible multinational company, we understand
that it is in our interest and the interest of our
stakeholders to ensure that the public services and
infrastructure we rely on are fit for purpose and remain
properly funded, including through a transparent, fair
and effective system of taxation.
Our commitment to acting with integrity and transparency
in all tax matters is particularly important given that our
contribution to public finances represents a major part of
our positive impact within the societies in which we operate.
This year, we paid governments on the African continent more
than R8 237 million in cash in direct taxes, raised R6 619 million
in cash on those governments’ behalf in indirect taxes and
paid governments more than R1 226 million in cash via
non-taxation-based revenue mechanisms.
The Group’s tax charge for 2017 of R6 102 million was 2.8% higher
than the prior year (2016: R5 934 million) in line with growth in
operating profit. The Group’s effective tax rate increased to 31.7%
from 31.5%.
The difference between the total tax contribution of R16 082 million
and the tax charge relates to a multitude of taxes other than
corporation tax. Our operating businesses are subject to more
than 40 different types of taxes and fees every year, of which a
significant number relate specifically to the telecommunications
industry. A comprehensive report on “Tax and our contribution to
public finances 2017”, which is separately available online,
provides a detailed review of Vodacom’s contribution to public
finances in each of our countries of operation. This report is
presented on an actual cash-paid basis, in addition to our
statutory reporting, to provide the clearest possible insight into
the scale of money flowing from Vodacom to governments.
In our view, a public record of the amount of cash transferred
from Vodacom to each country’s government is one of the most
effective forms of tax transparency. This year, we have expanded
our online report and in particular the country-by-country section
to include a narrative summary setting out the context of our
activities in that location together with the relevant financial data.
The summary, includes the number of Vodacom legal entities
present in the country plus an overview of the purpose of those
entities. In addition, we have expanded the current dataset
disclosed in the country-by-country section (which includes direct
taxation, direct non-taxation, indirect taxation, capital investment
and number of employees) as it would otherwise remain
incomplete without the addition of total external revenue and
profit before tax (excluding dividends) in each country. We believe
that this further enhances our commitment to transparency on tax.
vodacom For our online report on “Tax and our contribution to public
finances 2017” please go to