The financial and crypto regulator of South Africa issues notices to taxpayers seeking information regarding their earnings through crypto trading. Non-disclosers of such information will be sent to jails, says South African Revenue Service (SARS), and will be treated as tax evaders. Along with imprisonment for a maximum period of 2 years, heavy fines will also be imposed upon the taxpayer.
A news surfaced in today’s newspapers and on social media websites suggesting that SARS has issued notices to taxpayers. It was informed that the Regulator has sought information from taxpayers regarding income generated through cryptocurrency trading. If a taxpayer fails to provide information or, at worst, deliberately withholds such information, will be treated strictly in accordance with law.
According to the notice, taxpayers have been asked to detail their purpose of acquiring or disposing of digital currencies. Similarly, the crypto trader is asked to provide a certificate-in-support from his exchange showing the trader’s transactional record, investment/profit, and bank account details.
However, financial experts from South Africa suggested that the provision for providing this information could cause difficulties for taxpayers. In addition, requiring such information would mean that the Regulator is to initiate a crackdown operation against those crypto traders who are non-compliant.
In the meanwhile, country’s top consulting agency called Tax Consulting South Africa has urged taxpayers to seek advice. In particular, the agency has requested that taxpayers who have not provided the required information immediately cause compliance. It warned the taxpayers that in the event of non-providing of such information, heavy fines can be imposed upon the taxpayer. Furthermore, any non-compliant taxpayer may also likely to send to jail to serve maximum of two years or both i.e. fine plus imprisonment.
Agency warned crypto traders that even if they haven’t done any crypto transactions in the past, even then they should tread carefully. Whatever information is sought for should be provided accurately and correctly without any exception, told the Agency.
It was further found out that any person found withholding information deliberately will be treated as a “tax evader”. Those who have been served notices are required to respond irrespective of whether they have or have not traded any cryptocurrency.