## 3.4 Withholding Tax 

The auditors noted that no tax was deducted from payments to Microsoft Ireland and the lessor in Francistown. The auditors advised that failure to deduct Withholding Tax (WHT) constituted non-compliance to the Income Tax Act, which requires that withholding tax be deducted from payment made to both local and foreign entities, as well as rentals to local entities. 

In response management acknowledged the possible oversight regarding the payment to Microsoft Ireland, which was a net negotiated amount. Management further stated that the lessor in Francistown, a local entity, had been submitting tax returns. Management however endeavoured to comply with the WHT legislation by deducting the tax due from source and remitting same to BURS. 

## 175. Selebi Phikwe Economic Diversification Unit PEDU 

The financial statements of SPEDU for the financial year ended 31 March 2018 were audited by Messrs PricewaterhouseCoopers, Certified Auditors, who were appointed by the Board. 

## 2.0 Accounts 

## 2.1 Audit Opinion 

In the opinion of the auditors: 

The financial statements presented fairly, in all material respects, the financial position of SPEDU as at 31 March 2018, and its financial performance and its cash flows for the year then ended in accordance with the International Financial Reporting Standards. 

## 2.2 Financial Results 

During the year under review the financial operations of the company showed a loss of P3.36 million, compared to a loss of P458 690 in the previous year. 

Expenditure increased by 24% from P27.47 million in the previous year to P34.07 million in the year under review. Significant increases were noted in travel and subsistence expenses (both internal and external) of P1.62 million, staff costs of P4.11 million, donations of P765 971. 

