Bitrabo Editorial
According to a recent national news update, the South African Revenue Service (SARS) is urging taxpayers to report their cryptocurrency and digital assets as part of its Voluntary Disclosure Programme (VDP).
The rise in digital currencies, such as Bitcoin and Ripple’s XRP, has gained considerable traction in South Africa, making this announcement timely. This move follows expectations surrounding regulatory changes after the Financial Sector Conduct Authority classified cryptocurrency as a financial instrument.
Increase in Crypto Assets and Transactions
South Africa mirrors global trends with notable growth in cryptocurrency transactions. Recent media reports indicate that approximately 40% of the population has utilized Ripple and other digital forms of currency for online payments. SARS data reveals that around 5.8 million South Africans currently hold cryptocurrencies, engaging in a significant number of Bitcoin transactions.
Media Release: SARS Issues Warning on Crypto Asset Compliance
SARS has acknowledged the substantial rise in the use of various digital currencies among South Africans, highlighting the prominence of crypto assets… pic.twitter.com/fDbggUzSA1
— SA Revenue Service (@sarstax) October 9, 2024
SARS Concerns Regarding Compliance and Disclosure
While the embrace of cryptocurrency is on the rise, it also presents risks. The tax agency has expressed concerns over intentional tax evasion. Many individuals are reportedly neglecting to declare their crypto assets when filing tax returns.
To tackle this issue, SARS is enhancing its Voluntary Disclosure Program to encourage transparency in cryptocurrency ownership. In a notice dated October 9, the agency called on crypto traders and holders to report all income and assets, including digital currencies. Additionally, SARS is collaborating with cryptocurrency exchanges to aid in transparent reporting of transactions.
Collaboration extends to other parties, such as the Financial Sector Conduct Authority (FSCA), which is expected to provide information on digital currency service providers. Local and international exchanges are also on board with SARS to facilitate better compliance.
Streamlined Process for Declaring Crypto Assets
SARS has emphasized a user-friendly and simplified process for declaring cryptocurrency holdings. The agency plans to enhance its auditing capacity and utilize machine learning and generative AI to facilitate compliance. Edward Kieswetter, the SARS Commissioner, has appealed for cooperation regarding these new guidelines.
Nonetheless, failure to comply with these regulations can lead to significant penalties. Commissioner Kieswetter warned that those who ignore the new rules will be pursued by the agency. Moreover, the FSCA is also actively looking into individuals and companies that do not report their crypto transactions.
Image provided by News24, with data sourced from TradingView.