THE South African Revenue Service (Sars) is increasing its scrutiny of crypto traders by issuing tax notices and clarifying exchange control regulations. Traders must comply immediately to avoid penalties.
Recent developments have seen Sars turn its attention toward crypto traders, who are now receiving notices that their tax affairs are under review. These notifications are based on information obtained from various crypto asset exchanges, signalling a significant escalation in Sars efforts to enforce tax compliance within the burgeoning crypto sector.
Following South Africas move to regulate financial service providers who provide financial services related to crypto assets, licensed crypto-asset exchanges are now required to provide certain information to regulators.
Sars has cautioned traders that failure to provide requested information could be deemed a criminal offence under the Tax Administration Act. This move underscores the tax authoritys leave no stone unturned policy in its pursuit of revenue collection by any means necessary, and taxable profits from crypto trading are no exception.
To crack down on non-compliance, Sars appears to be leveraging artificial intelligence (AI) technology. However, the full extent of AIs implementation in identifying non-compliant crypto traders remains uncertain.
