ANNUAL REPORT

68Middle East Development Singapore ltdannual report 2007NOTES TO FINANCIALSTATEMENTS30 June 200720. INCOME TAX EXPENSE/(CREDITS)Group2007 2006$ $Current tax expense/ (credit) 116,118 (40,277)Deferred tax expense/ (credit) 59,439 (51,518)Total income tax expense/ (credit) 175,557 (91,795)The income tax benefit varied from the amount of income tax benefit determined by applying the Singapore income tax rate of18% (2006: 20%) to loss before income tax as a result of the following differences:Group2007 2006$ $Loss before income tax (141,094) (285,490)Income tax expense (benefit) at the statutory rate (25,397) (57,098)Non-allowable items 52,737 67,071Tax exemption (35,887) (5,491)Deferred tax valuation allowance 98,181 (130,442)(Over)/ under provision of tax in prior years (67,618) 13,710Effect of difference in tax rate in different countries 96,846 7,844Effect of reduction in tax rate 10,432 –Other items less than 3% each 46,263 12,611Total income tax expense/ (credit) 175,557 (91,795)The deferred tax amounts are as follows:Net change inconsolidated incomeBalance sheetstatement2007 2006 2007 2006$ $ $ $Group:Deferred tax liabilities:Excess of net book value of plant and equipment (8,207) (14,193) 5,986 (9,150)Taxable temporary differences (106,683) (42,855) (63,828) 52,186Total deferred tax liabilities (114,890) (57,048) (57,842) 43,036Deferred tax assets:Excess of tax written down value of plant equipment 27,690 18,274 9,416 18,274Provision 28,119 5,061 23,058 3,061Tax losses carryforwards 435,935 371,825 64,110 (143,295)Total deferred tax assets 491,744 395,160 96,584 (121,960)Net deferred tax assets 376,854 338,112 38,742 (78,924)Deferred tax assets valuation allowance (471,409) (373,228) (98,181) 130,442Balance (94,555) (35,116) (59,439) 51,518