Our performance
Governance review
Other
As a responsible multinational company, we unlsderstand 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.
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Public finances report |
