Sasol Form 20-F for the year ended 30 June 2021 - Book - Page 37
No.119/GR/2020, of 5 November 2020. Although we
no longer have any oil and gas assets in Gabon, we
continue to have a presence in Gabon while Sasol
Gabon SA remains active. As such, along with other
companies active in the region, we continue to engage
with BEAC and the IMF to seek a compromise that will
allow the oil and gas industry to operate more
efficiently.
confidence levels, and geopolitical events all pose risks
to the economy.
Exchange rate fluctuations, food prices,
electricity, water and import tariffs, global inflation
trends, oil price developments and the sovereign rating
outlook remain key risks to the inflation outlook.
COVID-19 uncertainties, global financial conditions,
trade disputes, emerging market sentiment swings and
domestic socio-political and policy developments,
could contribute to significant ongoing currency
volatility.
See “Item 10.D—Exchange controls” and
“Item 5.B—Liquidity and capital resources”.
ii. Tax laws and regulations
Even though there is a gradual roll-out of
vaccines across the world, this is inequitable and the
COVID-19 pandemic continues to impose high
humanitarian and economic costs, which impacts our
business, operations cash flows, financial condition,
and financials.
We operate in multiple tax jurisdictions
globally and are subject to both local and international
tax laws and regulations. Although we aim to fully
comply with tax laws in all the countries in which we
operate, tax is a highly complex area leading to the risk
of unexpected tax uncertainties. Tax laws are changing
regularly, and their interpretation may potentially result
in ambiguities and uncertainties, in particular in the
areas of international taxation and transfer pricing.
Where the tax law is not clear, we interpret our tax
obligations in a responsible way, with the support of
legal and tax advisors as deemed appropriate. Tax
authorities and courts may arrive at different
interpretations to those taken by Sasol, which may lead
to substantial increases in tax payments. Although we
believe we have adequate systems, processes and
people in place to assist us with complying with all
applicable tax laws and regulations, the outcomes of
certain tax disputes and assessments may have a
material adverse effect on our business, operating
results, cash flows and financial position.
(c) Legal and regulatory
i.
Exchange control regulations
South African law provides for exchange
control regulations which apply to transactions
involving South African residents, including both
natural persons and legal entities. These regulations
may restrict the export of capital from South Africa,
including foreign investments. The regulations may
also affect our ability to borrow funds from non-South
African sources for use in South Africa, including the
repayment of these borrowings from South Africa and,
in some cases, our ability to guarantee the obligations
of our subsidiaries with regard to these funds. These
restrictions may affect the manner in which we finance
our transactions outside South Africa and the
geographic distribution of our debt.
We could also be exposed to significant fines
and penalties and to enforcement measures, including,
but not limited to, tax assessments, despite our best
efforts at compliance. In response to tax assessments or
similar tax deficiency notices in particular jurisdictions,
we may be required to pay the full amount of the tax
assessed (including stated penalties and interest
charges) or post security for such amounts
notwithstanding that we may contest the assessment
and related amounts.
The Economic and Monetary Community of
Central Africa (CEMAC), which includes Gabon,
issued Foreign Exchange Regulation No. 02/18
CEMAC-UMAC which came into effect on 1
September 2019. This regulation allows the CEMAC
Central Bank (BEAC) to take measures to restore
reserves in foreign exchange currency including
restrictions on foreign currency bank accounts in and
outside CEMAC and limits a company’s ability to enter
into loans, import / export services and assets and make
investments. Fines for breach are extremely severe,
being up to 50% of the company’s assets. BEAC has
issued two moratoria on the regulation with the current
moratorium being effective until 31 December 2021.
The current moratorium is documented in Decision
In particular, one of our subsidiaries, SFI,
received assessments in February 2018 regarding the
2002 to 2012 tax years in relation to its international
business activities and specifically regarding SFI’s
place of effective management. The litigation
proceedings relating to the assessments in respect of
SFI are still ongoing.
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