Impact Minerals Ltd Annual Report 2023 49 Notes to the Consolidated Financial Statements continued NOTE 5: INCOME TAX Consolidated 2023 $ 2022 $ a) Major components of income tax expense are as follows: Current income tax expense/(benefit) – – Deferred income tax expense/(benefit) – – Income tax expense reported in the Consolidated Statement of Profit or Loss and Other Comprehensive Income – – b) The prima facie tax on loss from ordinary activities before income tax is reconciled to the income tax as follows: Loss from ordinary activities before income tax expense (5,782,028) (2,399,307) Prima facie tax benefit on profit from ordinary activities before income tax at 25% (2022: 25%) (1,445,507) (599,827) Tax effect of permanent differences: - Share-based expense 105,679 146,350 - Non-deductible expenses 1,490 2,024 - Government grant received (188,149) (61,405) - Other deductible expenses (5,000) - Tax losses not recognised 1,531,487 512,858 Income tax expense/(benefit) on pre-tax profit – – c) Deferred tax assets and (liabilities) are attributable to the following: Trade and other receivables (1,775) – Plant and equipment (7,626) (6,928) Right of Use Assets (110,522) – Exploration Assets (2,377,043) (2,949,330) Capital raising costs 139,718 186,392 Accrued expenses 7,388 6,375 Provision for employee entitlements 37,993 33,826 Right of Use Liabilities 112,401 – Other (10) Tax losses 2,199,466 2,729,675 – – d) Unrecognised deferred tax assets Deferred tax assets have not been recognised in respect of the following items as the Directors do not believe it is appropriate to regard realisation of future tax benefits as probable: – Tax losses 8,021,964 6,867,006 – Capital losses 444,481 444,481 8,466,445 7,311,487 The income tax expense or benefit for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction, adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.
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