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The South African Revenue Service (SARS) has expressed concern that citizens trading in cryptocurrencies are not declaring it on their tax returns.
Commissioner Edward Kieswetter says they have noted a phenomenal growth in the use of various digital currencies by many South Africans.
He says a staggering number of more than 5.8m South Africans hold a crypto asset, with Southern Africa boasting the largest uptake of Bitcoin in the world.
Kieswetter says 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 voluntarily.
He says as a follow-up, SARS will be including crypto assets in its compliance programmes.
SARS is engaging with the Financial Sector Conduct Authority (FSCA) regarding the provision of information on registered Crypto Asset Service Providers (CASPs) and will receive information directly from the local exchanges.
An agreement will be signed with the Minister of Finance in November that will catalyse the cross-jurisdictional exchange of such information in respect of South African taxpayers.
Kieswetter says it is their strategic objective to make it hard and costly for those who are willfully non-compliant.
Taxpayers who could be affected and are understandably concerned about their crypto asset compliance are reminded of the SARS Voluntary Disclosure Programme (VDP) to facilitate compliance.
This opportunity has strict conditions, for one, taxpayers must approach SARS first.
