News
South Africa Targets Crypto Traders Evading Tax
South Africa is not taking its tax regulations on cryptocurrency with linency. The country’s regulators are working towards improving ways to track crypto traders and their transactions. The South African Revenue Service is working determine if crypto traders are paying taxes. The SARS commissioner revealed that the commission is exploring ways to identify those evading tax as well as those profiting from it.
Mark Kingon, the acting Commissioner of SARS explained that identification of the crypto trader is one of the most critical aspects. He says, “The key thing is identifying people who are trading because it’s easy to say cryptocurrency gains must be deductible, but there are also those who lose. That’s why it’s important to identify the trader.” Since most digital asset trade utilise credit cards it isn’t that easy but once a trader that isn’t complying to the rules is discovered, SARS will launch an investigation into it.
Traders are expected to include their gains and losses from trading crypto in their taxable income when they report their tax returns. This is because the agency had determined that cryptocurrency related transactions will be subjected to the regular tax laws.
Earlier in April, SARS had stated, “The onus is on taxpayers to declare all cryptocurrency-related taxable income in the tax year in which it is received or accrued. Failure to do so could result in interest and penalties.” The SARS had revealed that cryptocurrencies would not be charged in terms of Value-Added Tax (VAT), since they are treated as an exempt financial service. Also the issuance, collection, selling, buying, acquisition or transfer of ownership of cryptocurrencies would not be covered with VAT.
While cryptocurrency is growing in South Africa, we cannot help but wonder how far this tax regulation will go in crypto currency in Africa.
