In his Medium-Term Budget Policy Statement (MTBPS), the Minister of Finance, Pravin Gordhan announced that tax revenue was down by R70-million, the budget deficit would reach about 7.6% of GDP, there would be no further funding for the state utility Eskom and that the government would be lowering exchange controls.

The allowance that South African individuals are able to have in foreign capital has been doubled from R2-million to R4-million.

Another positive move is the removal of the 180-day rule, whereby exporters were required to repatriate their foreign exchange to SA within 180 days of having receiving it. Although the limit of 180 days has been removed, the foreign exchange will have to be returned to South Africa at some stage.

In terms of companies making investments outside of South Africa, the outward investment limit has been increased from R50m to R500m. Applications below this limit will be processed by authorised foreign exchange dealers (banks).

Reported by Fin24