South African Tax Regulators Shift Focus To Crypto; Sends Out Audit Requests
- South African tax regulator, South Africa Revenue Authority (SARS), is reportedly looking to audit crypto investors, a new report from a local audit agency confirms.
- This follows the recent calls by the Financial Sector Conduct Authority, FSCA, on investment in elaborate cryptocurrency scams, which has become rampant in the past few years.
According to local news firm, Broadband, SARS sent out audit requests to taxpayers asking them to disclose their cryptocurrency trades and purchases. This was confirmed by Tax Consulting South Africa, which has recently been approached by a number of taxpayers on the issue. The requests asked taxpayers a number of questions on the taxpayers’ returns adding to the “purpose for which the taxpayers purchased cryptocurrency”.
Furthermore, the request also asked investors to provide a letter from the trading platform(s) confirming the investments and the relevant trading schedules for the period and bank statements.
According to Tax Consulting South Africa, the government has been ramping up its efforts against non-compliant crypto trading and investments and taxpayers will need to report their taxes. A spokesperson from the tax company said,
“This would have been reasonably expected by the taxpayers, if they had made any disclosure of cryptocurrency-linked trading amounts in their returns, along with the rental amounts and certain investments that were indeed disclosed to SARS.”
Warning to Cryptocurrency Investors
The leading financial regulator in the country, FSCA, also released a press statement warning investors of the potential scams and dangers of putting money in crypto. This followed the recent $644 million Bitcoin scam pulled by Mirror Trading International, which scammed over 28,000 investors locally and globally. The statement from the regulator reads,
“The FSCA is receiving a large number of complaints from South African investors who have lost their savings through investing in a crypto-related investment that they did not understand, or a scam packaged as a crypto investment promising unrealistic high returns.”