- South Africa tax authority ramps up crypto audits on undeclared assets.
- Crypto exchanges will be ordered to share data on request.
The South African Revenue Service (SARS) has issued a warning to crypto holders and traders to declare crypto assets on tax returns.
With over 5.8 million South Africans reportedly holding digital currencies, SARS is ramping up compliance within the sector.
To ensure transparency, SARS has teamed up with the Financial Sector Conduct Authority and is obtaining information from local exchanges.
This follows reports that SARS has begun issuing notices to crypto traders, requesting information on digital assets, including historical records, which could lead to tax liabilities for previously undeclared assets.
Licensed exchanges like Luno and VALR have indicated that while they do not share client data by default, they will comply with legal requirements if SARS requests information for specific investigations.
SARS Commissioner Edward Kieswetter highlighted the agency’s intent to improve compliance, noting that those who evade taxes unfairly impact honest taxpayers and limit the government’s ability to fund essential social programmes.
He warned: “SARS will pursue all without fear, favour, or prejudice.”
However, Wiehann Olivier, partner and head of fintech and digital assets at Forvis Mazars, thinks that SARS’ heavy-handed approach might not be the best.
He stated that the agency could encourage compliance more effectively through clear guidance, as “you can catch more flies with honey than with vinegar.”
