Almost 6 million SAns have cryptocurrency accounts, and SARS is coming for them
The South African Revenue Service has issued a warning for crypto account holders to declare their assets.
FILE: South African Revenue Service (Sars) Commissioner Edward Kieswetter. Picture: @sarstax/Twitter.
"Be warned, SARS will pursue all without fear, favour or prejudice.”
A new South African Revenue Service (SARS) alert about crypto asset compliance ends with this stern injunction from Commissioner Edward Kieswetter.
The taxman is looking for anyone who has not declared crypto held in local or offshore exchanges.
The number of South Africans holding these assets has now grown to 5.8 million, SARS says, noting that Southern Africa boasts the largest uptake of Bitcoin in the world.
The revenue service had previously invited crypto exchanges and those involved in trading or holding crypto assets to disclose related activities on a voluntary basis.
As a follow up, it will now be including crypto assets into its compliance programmes.
"Consequently, SARS is engaging with the Financial Sector Conduct Authority (FSCA) regarding the provision of information on registered Crypto Asset Service Providers (CASPs). SARS is also receiving information directly from the local exchanges."
South African Revenue Service
SARS warns that it is exchanging information with other tax authorities around the world as well.
More starting than the number of 5.8 million locally, is that 500 million citizens globally now have cryptocurrency accounts, remarks Steven Boykey Sidley, Professor of Practice at the Johannesburg Business School at UJ.
"There's the older system where you're supposed to declare everything, and most people we hope are doing that... but the world of crypto until recently had been unregulated so it was quite easy NOT to declare whatever profits you'd made and get away with it."
"There were some who did declare only because they were honest citizens, but a large number, particularly in SA, didn't bother because the law was grey."
Steven Boykey Sidley, Professor of Practice - Johannesburg Business School, UJ
With a new regulation being enforced, providers who allow people to open cryptocurrency accounts now have to apply for a license, Sidley points out.
These exchanges fall under the purview of the South African Reserve Bank, which means SARB can go to Luno for instance, and ask for a list of everybody who has an account.
The bottom line - declare your crypto assets, or have SARS knocking at your door, Sidely concludes.
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