The South African Revenue Service (SARS) has urged citizens to declare their cryptocurrency assets under its Voluntary Disclosure Programme, citing the increasing popularity of digital currencies.

Introduction of Tax Law Changes

With the rise in cryptocurrency transactions, SARS's decision was anticipated, especially after the Financial Sector Conduct Authority (FSCA) classified them as financial instruments. A survey indicated that about 40% of South Africans have used cryptocurrencies for online payments, and approximately 5.8 million individuals own digital currencies.

Collaboration with Exchanges to Enhance Transparency

Despite growing acceptance of cryptocurrencies, SARS is concerned about tax evasion. The agency is working with both local and international exchanges to collect transaction data and enforce compliance. SARS is also enhancing its audit teams and integrating machine learning and artificial intelligence to monitor adherence to regulations.

Consequences of Non-Compliance with New Requirements

Failure to comply with new tax regulations will result in consequences. Commissioner Edward Kieswetter emphasized that SARS will take action against those who ignore the requirements.

The South African Revenue Service emphasizes the importance of transparency regarding cryptocurrency assets and supports efforts to reduce tax evasion in the country.