The South African Revenue Service (SARS) has announced plans to include crypto assets in its tax compliance programs. SARS is seeking information on crypto users and is increasing its efforts to identify and audit non-compliant taxpayers. The revenue collector urged taxpayers concerned about compliance to participate in the Voluntary Disclosure Program, but those already under audit will be ineligible. SARS has emphasized the consequences of willful tax evasion and stated its commitment to pursuing all non-compliant taxpayers.
SARS Aims to Streamline Crypto Tax Compliance
The South African Revenue Service (SARS) announced plans to include crypto assets in its compliance programs. The revenue collector is seeking information on crypto users from the Financial Sector Conduct Authority (FSCA) and crypto asset service providers.
SARS stated on October 9 that it felt compelled to take this step after noticing that taxpayers were not declaring crypto assets and trades in tax returns. According to the statement, South African law requires SARS to account for all income and assets, including cryptocurrency. This understanding is thought to have prompted the revenue collector to initially request voluntary declarations from entities dealing with crypto.
However, in its latest remarks on the issue, SARS stated it is working to simplify compliance for taxpayers and traders. At the same time, the revenue collector emphasized the consequences of willful tax evasion. To achieve this, SARS said it has bolstered its audit teams and resorted to using the latest technologies.
“SARS has resorted to greater use of artificial intelligence, machine learning and algorithms to process our work. In implementing our mandate, SARS has recently issued query letters to taxpayers with crypto assets. These letters aim to gain insight into taxpayers’ investment in crypto assets and the trades undertaken to enable SARS to assess taxpayers’ compliance in this regard,” said South African revenue collector said.
South Africa Issues Warning to Non-Compliant Crypto Traders
Meanwhile, the revenue collector has encouraged South African taxpayers concerned about compliance to participate in the Voluntary Disclosure Program (VDP). However, SARS warned that taxpayers identified for audit will be ineligible for the VDP.
SARS Commissioner Edward Kieswetter stated that technology has significantly improved the revenue collector’s ability to identify non-compliant taxpayers. He added, “SARS will pursue all without fear, favor, or prejudice.”