Crypto Crackdown: SARS Comes for Tax Dodgers
In a shocking move, the South African Revenue Service (SARS) has announced that it will be cracking down on tax dodgers who are hiding their crypto assets. The tax authority has warned that it will be increasing its efforts to detect and prosecute those who are not declaring their crypto income.
According to SARS, more than 5.8 million South Africans are holding onto crypto assets, with Southern Africa boasting the largest uptake of Bitcoin in the world. However, the tax authority is "concerned" that these assets and trades are not being declared on taxpayers’ tax returns.
"We are not blind to the phenomenal growth of the crypto market, and we are not going to let this money slip through our fingers," said SARS commissioner Edward Kieswetter. "We are increasing our capability in our audit teams to support enforcement initiatives, and we are working with the Financial Sector Conduct Authority to get information on registered crypto asset service providers."
SARS has been using artificial intelligence and machine learning to detect and prevent tax evasion, and has already issued query letters to taxpayers with crypto assets. The tax authority is urging taxpayers to come forward and declare their crypto income, warning that those who are caught hiding their assets will face severe penalties.
"Let all know that technology has enhanced SARS’s ability to root out non-compliant taxpayers," said Kieswetter. "Be warned, SARS will pursue all without fear, favour or prejudice."
The move is part of SARS’s efforts to increase tax compliance and reduce the burden on compliant taxpayers. The tax authority is also working to improve its ability to detect and prevent tax evasion, and is urging taxpayers to be honest and dutiful in their tax obligations.
In a bold move, SARS is also set to sign a multilateral agreement with other tax authorities globally to exchange information on offshore crypto accounts. The agreement is expected to be signed in November and will mark a major step forward in the fight against tax evasion.
As the crypto crackdown heats up, taxpayers are being warned to get their affairs in order and to declare their crypto income. Those who are caught hiding their assets will face severe penalties, and SARS is urging taxpayers to take advantage of the opportunity to come forward and comply with their tax obligations.
In the words of SARS commissioner Edward Kieswetter, "We are not going to let the crypto cowboys run amok. We are going to get to the bottom of this and make sure that everyone pays their fair share of taxes."
