3.4 Withholding Tax 175. Selebi Phikwe Economic Diversification Unit PEDU  2.0 Accounts  2.1 Audit Opinion 2.2 Financial Results 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.  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.  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.  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. 191 