South Africans kissing SARS tax goodbye using bitcoin — but a crackdown looming

Cryptocurrencies were created to allow anonymous, frictionless, and trusted peer-to-peer transactions over the Internet.

Cryptocurrencies like Bitcoin have been a headache for the South African Revenue Service for a long time. SARS recently reiterated that normal income tax rules apply to crypto assets and that affected taxpayers must declare their gains or losses as part of their taxable income. SARS said the Crypto-Asset Reporting Framework standard ensured that gains in global tax transparency would not be gradually eroded.

These newly mined bitcoins can be sold or exchanged for cash. As it never touched the traditional financial system or crypto exchanges, it is nearly impossible to track. The crypto agents have partnerships with large crypto mining operations, which create a large number of bitcoins. Even if the money is withdrawn from a foreign crypto exchange with good reporting, the origin of the bitcoin remains unknown. That means SARS does not know it came from South Africa.

The scope will apply to any institutions that facilitate domestic or cross-border transfers of crypto assets.

Source: News Formal (newsformal.com)

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