Page 137 - EXIM-Bank_Annual-Report-2023

Management Discussion and Analysis Ensuring Sustainability Commitment to Lead Upholding Accountability Financial Statements 135

Notes to the fiNaNcial statemeNts

2. MATErIAL ACCouNTING PoLICy INForMATIoN (cont’d)
2.4 Summary of material accounting policy information (cont’d)

(o) Income tax
Income tax on the profit or loss for the year comprises current and deferred taxes. Current tax is the expected
amount of income taxes payable in respect of the taxable profit for the year and is measured using the tax rate
that has been enacted at the reporting date.
Deferred tax is provided for, using the liability method. In principle, deferred tax liabilities are recognised for all
taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences,
unused tax losses and unused tax credits to the extent that it is probable that taxable profit will be available
against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised.
Deferred tax is not recognised if the temporary difference arises from goodwill or negative goodwill or from the
initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the
transaction, affects neither accounting profit nor taxable profit.

Deferred tax is measured at the tax rate that is expected to apply in the year when the asset is realised or the
liability is settled, based on tax rate that has been enacted or substantively enacted at the balance sheet date.
Deferred tax is recognised as income or an expense and included in the statement of profit or loss for the year,
except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also
charged or credited directly in equity, or when it arises from a business combination that is an acquisition, in which
case the deferred tax is included in the resulting goodwill or negative goodwill.
In determining the Group’s and the Bank’s tax charge for the year it involves estimation and judgement,
which includes an interpretation of local tax law and an assessment of whether the tax authority will accept the
position taken. The Group and the Bank provides for current tax liabilities at the best estimate based on all
available evidence and the amount that is expected to be paid to the tax authority where and outflow is probable.
The recoverability of the Group’s and the Bank’s deferred tax assets is based on management’s judgement of the
availability of future taxable profits against which the deferred tax will be utilised.
(p) Zakat

Zakat is payable by the Group and the Bank in compliance with the principle of Shariah and in line with National
Fatwa Committee regulations.
(i) Method applied

Zakat is calculated using the growth method which is based on the adjusted net asset of the Group and the
Bank, i.e. net asset excludes any items that do not meet the condition for zakat assets and liabilities.
(ii) Beneficiaries of zakat fund

The method of zakat distribution, as being practised by the Group and the Bank, is as follows:
• Zakat is paid to Pusat Pungutan Zakat (“PPZ”) based on certain percentage of the adjusted net asset of the
Bank and the Group;
• PPZ will determine a certain percentage of the zakat for the Bank’s own distribution; and
• The distribution of zakat will be allocated by the Bank to three (3) groups of people who are eligible to
receive zakat (asnaf):
a. The destitute (fakir);
b. The poor (miskin); and
c. Those in the cause of Allah (fi sabilillah).