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Author Topic: [2017-12-15] South African Revenue Service Has Their Eye On Your Bitcoins  (Read 42 times)
Terraformer
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December 16, 2017, 08:11:30 AM
 #1

The South African Revenue Service (SARS) is showing a keen interest in monitoring crypto trading in the country through blockchain-based technology.

SARS has a fickle relationship with the people of South Africa, which is quite common between the average person and the tax man. South African citizens have to submit a (hopefully) true and honest financial declaration, which could result, depending on the information given, in said citizens paying SARS a certain amount of money. However, this information is also used for verification purposes to see if a person lies about their income.

Banks and other financial institutions are also required to give SARS their clients’ investment information in order to verify their declaration. This is where it gets interesting. As with most countries, South Africa does not have any regulations or processes in place with regard to cryptocurrencies and any possible gains due to the virtual currency rising in value. Essentially, they will just have to rely on South Africans being honest about how much profit they’ve made off of crypto.

UNCLE SARS WANTS YOU… TO DECLARE YOUR CRYPTOS

Seeing as SARS banks on this information, and resultant funds, to keep revenue flowing for the South African government, it stands to reason that they would like to be able to track crypto trading. According to Moneyweb, this is exactly what they plan on doing. Dr Randall Carolissen, SARS group executive for research, had this to say:

"As you can imagine it is very difficult – the blockchain technology. Without revealing too much, we are talking to some of the top technology companies in the world that [are] doing similar work for Canada and the UK, and we are hoping to get that technology."

He went on to add:

"At the moment, we are treating cryptocurrency in the same way as capital realisation, so in other words, it is like a Krugerrand. If you buy it at a particular point and you then sell it, you will be faced with a capital appreciation and then we will treat it as Capital Gains Tax."

SARS is taking it one step further by teaming up with the country’s reserve bank (SARB) to evaluate cash flow, so as to determine if the amount of money leaving the country matches the amount of goods coming into the country. The institution is also working with the Organisation for Economic Cooperation and Development (OECD) to put a system in place.

BLOCKCHAIN-BASED TECHNOLOGY WILL BE USED

In July this year, Loerien Gamaroff, who is the CEO of South African blockchain-based solutions provider Bankymoon, confirmed that they were in discussions to test these possible new regulations. He had this to say at the time:

"All we are doing at this point is seeing how far this relationship will go on within this sandbox. This is because the Reserve Bank is very hesitant to give a stamp of approval on anything that comes out. The sandbox will only be Bitcoin-focused during this initial phase, but is focused on applying broad regulations to all cryptocurrencies."

South Africa is the latest emerging market that will be implementing crypto regulations. However, it seems to be more of a self-preserving effort for SARS to ensure that the country’s revenue doesn’t disappear with the country’s increase in crypto trading.

http://bitcoinist.com/south-african-revenue-service-eye-bitcoins/
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December 16, 2017, 10:06:55 AM
 #2

The title is a bit sensationalist, don't you think? When I read the title I thought SARS was going to confiscate bitcoins outright. But it is OK in my opinion that they want to regulate bitcoins so that they become taxable.

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December 16, 2017, 10:42:21 AM
 #3

No tax authority in the world is going to allow a revenue stream to go untaxed, especially a lucrative one like cryptocurrencies. Tax authorities in the US, India and now South Africa are looking at it, because people have made good money in these countries.
If the market crashes, tax authorities will go back to ignoring the people involved in cryptocurrencies.


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December 16, 2017, 11:39:55 AM
 #4

No tax authority in the world is going to allow a revenue stream to go untaxed, especially a lucrative one like cryptocurrencies. Tax authorities in the US, India and now South Africa are looking at it, because people have made good money in these countries.
If the market crashes, tax authorities will go back to ignoring the people involved in cryptocurrencies.

I agree,and I think that is something which is the biggest challenge for governments around the world.Their main goal at this time is how to ensure the payment of taxes and as much as possible control over those using any cryptocurrency.The idea of a decentralized monetary system for some is true invention and a great thing,for some others(banks,governments)is the nightmare from which they try to wake up.

I think we're all aware that complete anonymity when using BTC does not actually exist,and in the future it will probably be even smaller.But this is something that is inevitable,and we have to adapt to the new rules of the game.

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December 16, 2017, 03:02:54 PM
 #5

I Googled South Africa and I came up with this :

" South Africa recorded a government debt equivalent to 51.70 percent of the country's Gross Domestic Product in 2016. Government Debt to GDP in South Africa averaged 38.65 percent from 2000 until 2016, reaching an all time high of 51.70 percent in 2016 and a record low of 27.80 percent in 2008. "

Source : https://tradingeconomics.com/south-africa/government-debt-to-gdp

It is no wonder that the South African government is looking for new tax income sources.  Roll Eyes .... Bitcoin will be milked for

new tax income.  Sad

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December 16, 2017, 05:02:27 PM
 #6

I Googled South Africa and I came up with this :

" South Africa recorded a government debt equivalent to 51.70 percent of the country's Gross Domestic Product in 2016. Government Debt to GDP in South Africa averaged 38.65 percent from 2000 until 2016, reaching an all time high of 51.70 percent in 2016 and a record low of 27.80 percent in 2008. "

Source : https://tradingeconomics.com/south-africa/government-debt-to-gdp

It is no wonder that the South African government is looking for new tax income sources.  Roll Eyes .... Bitcoin will be milked for

new tax income.  Sad

Good catch. Its gonna be ugly for South African bitcoin enthusiast because they will be hounded and milked for taxation purposes only. On the other side, their government should have a proper regulation to imposed these so called tax. So it will be another constant battle for bitcoiners on hiding their bitcoins and crypto's. Much better to really just put your bitcoin in a safe wallet and not go to local exchanges so that the government can't touch you. But then again, there will be a time that you need to cash it out. And local exchanges requires KYC/AML so that the government will know you identify and can tracked you down for tax purpose.  Grin

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December 16, 2017, 07:08:49 PM
 #7

SARS has a fickle relationship with the people of South Africa

That shouldn't come as a surprise since SARS is a severe acute respiratory syndrome Grin A great name for a government agency. I'm getting sick of them already.

South Africa should first try to take care of their crime problem. Have you ever been there? Most houses have high fences and double doors and people are getting robbed at gunpoint in broad daylight. Instead of dealing with these problems the authorities are looking for new ways to make the lives of the citizens even more miserable.
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December 17, 2017, 04:12:12 AM
 #8

The title is a bit sensationalist, don't you think? When I read the title I thought SARS was going to confiscate bitcoins outright. But it is OK in my opinion that they want to regulate bitcoins so that they become taxable.

The bottomline with all of this fuss is squeezing some revenue from taxable income and capital gains. Actually, this has been normal with all of the countries where Bitcoin is allowed to be traded openly. The government has to levy the required and legal tax because cryptocurrency is also a business and we have the obligation to declare and pay whatever income/gains we got from our cryptocurrency dealings. There should be no problem when the government will require us to pay the tax as long as in return Bitcoin is recognize either as an asset or currency or much better both. Those who are living in countries where the government is not yet strict in implementing their tax codes should feel lucky for the time being. But seriously, implementing this can be so challenging and we know why.

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December 17, 2017, 08:15:50 AM
 #9

I am going to play Devils advocate here for a moment and say that they should tax their Bitcoiners like any other currency or commodity. Why should Bitcoiners be any different from anyone else? They take their Capital Gain from their citizens and in return, they allow for Bitcoin to be used and traded in their country.

As soon as people start avoiding paying tax with Bitcoin, then the government will ban it. Pay the damn taxes and be done with it. ^grrrrrrr^ 

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