South Africa Tax Agency wants crypto users to declare assets

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A warning has been issued to anyone holding or trading cryptocurrencies in South Africa by the South African Revenue Service (SARS) to make sure to declare their digital assets when filing their tax returns.

Following the rise of South African digital currency holders to over 5.8 million, SARS is tightening the rules to ensure everyone is following tax laws.

Consequently, SARS is working with the Financial Sector Conduct Authority and gathering data from local crypto exchanges in order to enforce this.

This move followed reports that SARS sent out notices to crypto traders, asking for details about their digital assets, including past records. This could also mean that people who haven’t declared their crypto assets for a while might now have to pay taxes.

Luno and VALR, which are exchanges licensed to operate in South Africa, made it clear that they do not automatically share client information. However, if SARS asks for details as part of an investigation, they will comply with legal requirements.

Edward Kieswetter, SARS Commissioner emphasised that the agency is serious about enforcing tax laws, additionally warning that tax evasion hurts honest taxpayers and limits the government’s ability to fund important social programs. “SARS will pursue all without fear, favour, or prejudice,” he stated.

Not everyone agrees with this tough approach as Wiehann Olivier, a partner and head of fintech and digital assets at Forvis Mazars, believes that SARS could curtail the situation better by providing clearer guidelines. He highlighted that a more cooperative approach might encourage people to comply with tax laws more willingly.

Overall, those involved in crypto should be aware of the increasing focus on transparency and taxation as SARS is increasing efforts to ensure that crypto holders and traders adhere to the rules, and non-compliance could lead to penalties.