Do you own crypto assets? SARS wants to hear from you

In an alert issued on Tuesday, the South African Revenue Service (SARS) voiced its concern that although southern Africa boasts the largest uptake of bitcoin in the world, taxpayers may not be declaring their crypto assets and trades.

SARS, which is legally obligated to account for any income or assets held by taxpayers, pointed out that it had invited crypto exchanges and those involved in trading or holding crypto assets to disclose any related activities.

Going forward, SARS will include crypto assets in its compliance programmes. Practically, this means SARS is engaging with the Financial Sector Conduct Authority (FSCA) to share information about registered crypto-asset service providers (Casps) and is also receiving information directly from the local exchanges.

By the end of June, the FSCA had approved 138 Casps and declined five applications from a total of 383. Another 80 applications were voluntarily withdrawn after applicants engaged with the FSCA regarding the appropriateness of their business and operating models. The remaining applications are under consideration.

The FSCA said applicants who had voluntarily withdrawn their applications or had their applications declined were welcome to reapply, provided they can demonstrate full and proper compliance with the applicable licensing requirements. However, in the interim, these companies may not undertake any Casp-related activities as defined under the FAIS Act.

Global tax authorities cooperation

SARS has cautioned that it is exchanging information with other global tax authorities on the back of multilateral agreements, so taxpayers hoping to hide crypto assets abroad may be in for a rude awakening.

“The provision of offshore crypto accounts will be the subject of a multilateral agreement to be signed by ministers of finance in November 2024 which will catalyse the cross-jurisdictional exchange of such information in respect of South African taxpayers,” said SARS.

Taxpayers who could be affected and are concerned about their crypto asset compliance are reminded of the SARS voluntary disclosure programme to facilitate compliance. This opportunity has strict conditions:

• You must approach SARS before they approach you; and


• Once SARS has identified you for an audit, you may not apply to be part of the voluntary disclosure programme.

“SARS has been working ceaselessly to ensure compliance by all taxpayers, and those who are evading their responsibility make the burden of compliance difficult for compliant taxpayers. This is not only unfair to honest taxpayers but affects the vulnerable in society disproportionately by limiting the state’s ability to deliver social grants and other much-needed social benefits.

“Let all know that technology has enhanced SARS’ ability to root out non-compliant taxpayers. Be warned, SARS will pursue all without fear, favour or prejudice,” said SARS Commissioner Edward Kieswetter.

The days of crypto assets being reserved for dodgy activities have long passed. A recent Luno report, Bridging digital and fiat — crypto’s role in modern payments, highlighted the exponential growth of crypto payments. Pick n Pay alone has recorded more than R1-million in monthly sales paid in crypto, up from just R25,000 a year ago.

Luno has processed more than R3-million worth of crypto payments through the Luno Pay feature since its launch in September 2023. Luno’s SA manager, Christo de Wit, says the average basket size for purchases on Luno Pay is R370 and the largest basket to date has been R10,000 (a Luno-imposed limit). The most popular cryptocurrency used in payments is bitcoin. DM