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Income taxes
 12 Months Ended
Mar. 31, 2022
Income Tax Disclosure [Abstract]  
Income taxes Income taxes
The following table presents domestic and foreign components of income/(loss) before income tax expense (in thousands):
As of March 31,
202020212022
Domestic (South Africa)$30,464 $14,443 $12,254 
Foreign(9,648)2,786 1,111 
Income before income tax expense$20,816 $17,229 $13,365 

The following is a summary of the Company’s provision for income taxes for the years ended March 31, 2020, 2021 and 2022:
As of March 31,
202020212022
Current tax
Domestic (South Africa)$(4,261)$(5,768)$(4,346)
Foreign federal— (165)(74)
Foreign state(978)(1,020)(517)
Total Current(5,239)(6,953)(4,937)
Deferred tax
Domestic (South Africa)(4,744)3,987 573 
Foreign federal55 83 (155)
Foreign state99 249 101 
Total deferred(4,590)4,319 519 
Total income tax expense$(9,829)$(2,634)$(4,418)
The following table provides a reconciliation of the income tax expense calculated at the South African statutory tax rate, of 28%, to the income tax expense:
As of March 31,
202020212022
Income before income tax expense$20,816 $17,229 $13,365 
Tax at South African statutory rate of 28%5,828 4,824 3,742 
Tax effect of:
– Income not subject to tax— (35)(55)
– Non-deductible expenses (1)
235 929 626 
– Non-deductible/(non-taxable) foreign exchange movements (2)
4,085 (3,401)(419)
– Investment in subsidiaries42 217 202 
– Withholding tax— 23 113 
– Utilization of previously unrecognized tax
losses (3)
(195)(252)53 
– Foreign tax paid (4)
623 425 357 
– Foreign tax rate differential(213)(241)(115)
– Recognition of previously unrecognized tax losses (11)(73)35 
– Tax losses not recognized75 92 314 
– Under-provision prior years138 298 (102)
– Tax incentives in addition to cost incurred (5)
(897)(321)(253)
– Transfer pricing imputation65 21 67 
– Tax rate change(6)
— — (226)
– Imputation of controlled foreign company income119 100 83 
– Other(65)28 (4)
Income tax expense$9,829 $2,634 $4,418 

(1) These non-deductible expenses consist primarily of items of a capital nature and costs attributable to exempt income, primarily dividends from subsidiaries.
(2) The non-deductible/(non-taxable) foreign exchange movements arise as a result of the Company’s internal loan structures.
(3) The utilization of assessed losses arises mainly in Europe where historical assessed losses were being utilized.
(4) The foreign tax paid relates primarily to withholding taxes on revenue earned in jurisdictions where the Company does not have a jurisdictional presence.
(5) The tax incentives relate mainly to research and development allowances, as well as learnership allowances received in terms of the South African tax authorities. MiX Telematics International Proprietary Limited (“MiX International”), a subsidiary of the Company, is eligible for a 150% allowance for research and development spend in terms of section 11D of the South African Income Tax Act. During fiscal years prior to 2017, the additional 50% tax deduction was disallowed on certain projects because the South African Department of Science and Innovation (“DSI”) was of the view that the amounts claimed did not constitute qualifying expenditure. After a lengthy legal process, the DSI approved the additional deductions during fiscal year 2020, resulting in the recognition of a tax benefit of $0.5 million for fiscal year 2020 that previously was not considered probable.
(6) The tax rate change relates to MiX Telematics Europe Limited’s corporate tax rate change from 19% to 24%.

The Company’s weighted average tax rate is 33.1% (2021: 15.3%, 2020: 47.2%).
The Company’s net deferred tax liabilities consist of the following (in thousands):

As of March 31,
20212022
Deferred tax assets
Deferred revenue1,224 1,432 
Capital allowances for tax purposes823 1,010 
Accruals5,037 4,936 
Tax losses1,456 2,000 
Stock based compensation540 554 
Deferred foreign currency losses407 338 
Recurring commission liability186 241 
Lease liabilities552 517 
Other166 39 
Gross deferred tax assets10,391 11,067 
Set-off of deferred tax balances(6,098)(6,652)
Net deferred tax assets before valuation allowance4,293 4,415 
Less valuation allowance(511)(647)
Net deferred tax assets3,782 3,768 
Deferred tax liabilities
Capital allowances for tax purposes3,494 3,629 
Intangible assets3,559 3,735 
Prepaid expenses133 232 
Deferred foreign currency gains6,186 5,673 
Investment in subsidiaries427 646 
Deferred commissions 802 719 
Lease assets482 638 
Other202 352 
Gross deferred tax liabilities15,285 15,624 
Set-off of deferred tax balances(6,098)(6,652)
Net deferred tax liabilities9,187 8,972 
Net deferred tax liability(5,405)(5,204)
The gross movement in net deferred tax assets/(liabilities) is as follows:
Opening balance(8,328)(5,405)
Foreign currency translation(1,415)(268)
Other comprehensive income19 (50)
Statement of Income charge4,319 519 
Closing balance(5,405)(5,204)
Recognition of deferred tax
Deferred tax at year-end has been recognized using the following corporate tax rates:

Region20212022
South Africa28 %28 %
Australia30 %30 %
Brazil34 %34 %
Romania16 %16 %
Thailand20 %20 %
Uganda30 %30 %
United Arab Emirates— %— %
United Kingdom19 %24 %
United States of America21 %21 %

Realization of deferred tax assets is dependent upon the generation of future taxable income, if any, the timing and amount of which are uncertain. As of March 31, 2021 and 2022, the Company believes that it is not more likely than not that deferred tax assets of $0.5 million and $0.6 million, respectively, will be realized in respect of cumulative tax losses amounting to $2.0 million and $2.5 million, respectively. Accordingly, the Company has recorded a valuation allowance on such deferred tax assets.

For the year ended March 31, 2021, the valuation allowance decreased by $0.3 million primarily as a result of utilizing previously unrecognized tax losses. For the year ended March 31, 2022, the valuation allowance increased by 0.3 million as a result of an increase in deferred tax assets not recognized on current year tax losses.

As at March 31, 2021 and 2022, the Company had tax loss carryforwards of $11.7 million and $5.1 million. respectively. The tax loss carryforwards can be carried forward indefinitely, except for tax losses of $0.3 million in Thailand, which expire between 2023 and 2025.