SARS cracks down on undeclared crypto income
SARS has launched a crackdown on taxpayers who failed to declare income from cryptocurrency investments and trades.
Image: File
The South African Revenue Service (SARS) has reportedly launched a focused crackdown on taxpayers who have failed to declare income from cryptocurrency investments and trades.
This is, according to Wiehann Olivier, Partner and FinTech & Digital Assets Lead at legal and advisory firm Mazars, who said that the revenue service has formed a dedicated team to investigate under-declared income linked to digital assets such as Bitcoin and other cryptocurrencies.
“At the end of last year, there were a lot of taxpayers who actually received letters from SARS saying that they owe a significant amount of money due to cryptocurrency transactions or gains generated from trading,” Olivier said in an interview with Kaya FM.
“SARS has created a dedicated team to focus on this going forward, and we’re going to see more scrutiny on taxpayers who have underdeclared their income in relation to blockchain-based digital assets such as cryptocurrencies.”
Olivier added that there are around half a million South Africans who currently declare gains and losses from cryptocurrency transactions. However, data suggests that over 6 million South Africans own cryptocurrency, indicating widespread under-declaration.
"I think there are about half a million South African taxpayers who actually declare their gains and losses in relation to cryptocurrency. But based on chain analysis, census, and the analytics, there's about, I think, just over 6 million South Africans that actually own cryptocurrency," he added.
"So you can see there's a clear under-declaration of gains in relation to cryptocurrency. And of course, this has resulted in SARS paying more attention to it".
Furthermore, he also revealed that SARS is looking to include cryptocurrency gains within its Voluntary Disclosure Programme (VDP).
“Because I think there’s an extra revenue stream that they can effectively generate from these gains that taxpayers generate. SARS is looking to implement this in their voluntary disclosure program,” he added.
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