@GrahamvdR, you have many issues to deal with in your situation. To understand all this, it will be helpful to create a test business, uncluttered with any other transactions. In the test business, set an exchange rate for January 1 of .25USD per RTGS and one for June 1 of .20USD per RTGS. Create a bank account in USD and one in RTGS. Set starting balances of 1000 for each bank account in their respective currencies. (See this Guide if you don’t know how to do that: https://www.manager.io/guides/15718.) Also create a supplier denominated in USD.
First, you have tax withheld at the source on your purchase. For an explanation of that, see this Guide: https://www.manager.io/guides/12346. Create a purchase invoice dated in January for your USD supplier with one line item for 100USD (it doesn’t matter what it’s for or where you post the expense) and one for the withholding tax at -10USD. Now look at the Summary to see what happened.
The tax withheld will be calculated in the currency of the supplier, in this case USD. But it will be posted to your Withholding tax payable liability account in RTGS at the exchange rate in effect on the day of the transaction. You would end up owing 40RTGS to the tax authority for your supplier. That amount will not change, even when the exchange rate later changes to 1:5. In this case, things would work in your favor, assuming you could pay the amount in RTGS.
Unfortunately, you have the apparent requirement to remit the withheld tax in USD. This is your tax authority’s attempt to force you to bear the consequences of currency devaluation. The thing is, you can only pay in USD if you have a USD bank account. And you will need to independently determine what amount was withheld in USD. If you pay 10USD on June 6, and post the payment to Withholding tax payable, the payment will be converted at the new exchange rate. The result will be a 50RTGS debit to the liability account, meaning the tax authority owes you money. Whether they would ever pay that or allow it to offset other amounts you owe them is beyond my knowledge. You need to consult a local accountant or the tax authority about that.
The complication, as you have no doubt realized, comes from your authority’s requirement to submit withheld tax in a foreign currency. Manager has no trouble calculating withholding tax in foreign currencies, but there is no way to avoid conversion of the liability to base currency. But some local expert will have dealt with this issue. Seek their advice.