During the South African Budget Speech earlier in 2020, National
Treasury proposed a complete overhaul of the exchange control
systems. This aimed to modernise and reduce some of the burdensome
and unnecessary administrative approval processes by implementing a
new capital flow management system.
National Treasury has since released the draft Taxation Laws
Amendment Bill, 2020 on 31 July 2020 for comment, which includes
tax proposals linked to the implementation of the new capital flow
management system. At this stage, National Treasury has indicated
that the changes to the exchange control systems will likely take
place in 2021.
Proposed reforms to exchange control systems
The overhaul of the exchange control system will involve a shift
from the current negative list framework. By default, all foreign
exchange control actions are prohibited unless specifically
approved to a positive list framework, in terms of which all cross
border transactions will be allowed,
