The South African Revenue Service's head of tax law and administration has indicated that changes may be afoot to South Africa's foreign currency law that will make it easier for companies to calculate their liabilities.
Addressing a recent accounting conference, Kosie Louw, a member of the SARS Executive Committee, stated that the foreign exchange rules could be changed so that firms will be able to calculate their liabilities based on the exchange rate on the day that a particular transaction took place.
Under current rules, firms and individuals must use an average exchange rate based on the previous year. According to one practicing legal and tax expert, such a system can prove to be "prejudicial" to SARS and South African taxpayers, as well as affecting firms with operations offshore.
In addition, Louw has pointed to difficulties regarding the licensing of foreign financial institutions operating offshore and revealed that the government would reconsider the rules on the regulation of these institutions.
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