PAY YOUR TAX OR FACE THE PENALTY: SOUTH AFRICA’S TAX AGENCY TO CRYPTOCURRENCY TRADERS

South Africa’s tax agency is searching for ways of knowing tax-evading south African cryptocurrency traders, this was made known by the acting head of South Africa’s’ tax agency.

The South African Revenue Service (SARS) through its acting Commissioner Mark Kingon said while speaking at the Institute of Internal Auditors SA conference in Johannesburg recently, that they are seriously looking for approaches to find adamant cryptocurrency traders so as to properly look into any situation of failure to declare profits from investments.

As reported, Kingon explained the need to identify crypto traders, stating:

“The most important thing is in identifying crypto trading because it’s easy to say cryptocurrency profits must be deductible as tax, but there are also those who lose. That’s why it’s important to identify those who trade.”

An adamant trader would be put under investigation after being known, the official remarked, pointing to a money trail by suggesting that most traders used their cards to purchase cryptocurrencies.

Kingon stated whereas tax authority had sure ways– without any specifics beyond looking into card purchases- of distinguishing cryptocurrency traders, it lacked an economical clear-cut method of combating evasion of tax since traders additionally involved in activity outside the country whereas some use foreign bank accounts.

“[I]n terms of the broader news, the common reporting standards, country by country, (ensures) the world is becoming smaller and we have gotten way more individuals transacting in foreign jurisdiction,” Kingon additional added, suggesting SARS would shortly have the ways to snoop into transactions in foreign bank accounts thanks to information-sharing practices.

“I suppose it’s a matter of time, but it will help us to do better,” he added.

SARS has stapled the responsibility solely on cryptocurrency traders and miners to declare gains or losses as a part of their nonexempt financial gain under general rules. Major gains or losses from trading, buying and mining of cryptocurrencies through exchanging platforms and usage in payments are all to be declared, the agency told taxpayers in an exceedingly public notice in April this year.

As reported by as at the time, the taxation agency warned:

The burden is on taxpayers to declare all cryptocurrency-related nonexempt financial gain within the tax year during which it’s received or accumulated. Failure to do therefore will lead to interest and penalties.

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