SARS has issued a stern warning to taxpayers who hold digital currencies, emphasising that failing to declare crypto assets on tax returns will not be tolerated, according to Moneyweb.

SARS has highlighted its growing concerns over non-compliance and reiterated that it has already begun enhancing its monitoring and enforcement capabilities to ensure all crypto-related income is accounted for. 

According to SARS, more than 5.8m South Africans hold crypto assets, yet many have not declared them in their tax filings.

To tackle this, SARS is partnering with the Financial Sector Conduct Authority to obtain information on registered crypto asset service providers and has begun receiving data directly from local exchanges.

Through international agreements, SARS also exchanges information with tax authorities worldwide.

A new multilateral agreement – expected to be signed in November 2024 by Finance Ministers – will allow for cross-border sharing of information related to offshore crypto accounts of SA taxpayers.

SARS Commissioner Edward Kieswetter warned that the tax entity will leverage advanced technologies – including artificial intelligence and machine learning – to identify non-compliant taxpayers and ensure everyone meets their legal obligations. 

To address the issue, SARS has increased the capacity of its audit teams and started issuing query letters to taxpayers identified as holding crypto assets.

The agency has encouraged taxpayers to take advantage of the voluntary disclosure programme before being selected for audit, as once identified, they are no longer eligible for the programme.

Full Moneyweb report

See also full Business Day report