South African Tax Collector Targeting Crypto Investors In Offer To Raise Additional Income – Bitcoin Taxes News
The latest reports from South Africa suggest that the country’s tax agency will now target cryptocurrency investors as it attempts to increase the total value of revenue collected. Along with high net worth individuals and foreign investors, digital currency holders are now an area that âis likely to generate a large chunk of additional taxâ for the tax collector.
Crypto investors oblivious to tax obligations
However, according to a report, many South African cryptocurrency holders “ignore the fact that cryptocurrency trading makes them subject to tax.” The report, which draws on the expert opinion of Thomas Lobban, states that “the South African Revenue Service (SARS) (currently) has a high profile in cryptocurrency trading.”
Additionally, Lobban, Legal Officer at Tax Consulting South Africa, said:
As with any other asset class, investors should understand their tax obligations regarding their crypto investments and plan accordingly. If they don’t, then there’s a good chance they’ll end up with an unwanted tax bill down the line.
Different trades of crypto
Meanwhile, the report also quotes Lobban explaining how the different types of crypto transactions can affect the type of tax that will be paid. For example, Lobban asserts that “crypto transactions could be considered capital intensive in nature and therefore subject only to capital gains tax.”
On the other hand, certain transactions âcould be considered as generating income and would therefore be taxed according to the normal tax rate of the taxpayer according to the tax tablesâ. The tax advisor also points out that when “a transaction is made between, say, bitcoin and ethereum, the notional profits from that transaction would also be taxable.” This position contrasts with the prevailing belief that a âtax eventâ only occurs when cryptocurrency is withdrawn and converted to legal tender.
Meanwhile, Lobban reveals that SARS is already asking for information about crypto transactions on verification letters issued to taxpayers. In addition, the revenue collector would have “invested heavily in its IT capabilities”. The report adds that such capabilities will allow SARS to “more effectively analyze financial and transaction data and identify transactions entering and leaving crypto platforms.”
What do you think of SARS targeting of crypto investors? Let us know what you think in the comments section below.
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