The South African Revenue Service is worried that crypto assets and trades are not being declared on tax returns by taxpayers. Picture: AFP
The South African Revenue Service (Sars) will be including crypto assets into its compliance programme, according to a statement released by the company.
Sars said that are more than 5.8 million South Africans who hold a crypto assets, with Southern Africa having the biggest uptake of Bitcoin in the world.
The tax authority said that they are concerned that these crypto assets and trades are not being declared by taxpayers on their tax returns.
“Sars is legally obligated to account for any income or assets held by taxpayers and had previously invited crypto exchanges and those involved in trading or holding crypto assets to disclose related activities on a voluntary basis,” Sars said.
Sars will be engaging with the Financial Sector Conduct Authority (FSCA) for information on registered Crypto Asset Service Providers (CASPs) and is also receiving information directly from the local exchanges.
“Importantly, it must be underscored that through multilateral agreements Sars is exchanging information with other tax authorities globally,” the tax authority said.
“The provision of offshore crypto accounts will be the subject of a multilateral agreement to be signed by Ministers of Finance in November 2024 which will catalyse the cross jurisdictional exchange of such information in respect of South African taxpayers.”
In line with their legal mandate, Sars offers certainty and clarity about legal obligations for taxpayers and traders. They are working hard to make it easy and simple for taxpayers and traders to comply with their obligations.
“Critically, it is our strategic objective to make it hard and costly for those who are wilfully non-compliant. These efforts are intended to support our strategic intent of fostering a culture of voluntary compliance,” Sars said.
Sars has increased their capability to support enforcement initiatives by using artificial intelligence, machine learning, and algorithms to process work.
The tax authority has issued query letters to taxpayers with crypto assets to gain an insight into their crypto assets investments and trades undertaken so Sars can assess the compliance of taxpayers.
Taxpayers who could be impacted or worried about their crypto asset compliance are reminded of the Sars Voluntary Disclosure Programme (VDP) to facilitate compliance.
Sars said: “This opportunity has strict conditions. One being that taxpayers must approach Sars first. Once Sars has identified the taxpayer for audit, they are precluded from applying for the VDP.”
Sars Commissioner Edward Kieswetter has reminded taxpayers to honour their legal obligations by declaring all their income.
Kieswetter said: “Sars has been working ceaselessly to ensure compliance by all taxpayers, and those who are evading their responsibility make the burden of compliance difficult for compliant taxpayers.”
“This is not only unfair to honest taxpayers but affects the vulnerable in society disproportionately by limiting the state’s ability to deliver social grants and other much needed social benefits.”
Kieswetter also warned taxpayers that technology has enhanced the ability of Sars to root out taxpayers who are non-compliant.
“Be warned, Sars will pursue all without fear, favour or prejudice,” Kieswetter said.
IOL Business
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