Cryptocurrency is a very popular topic among governments and regulators these days. More specifically, the concept of taxing cryptocurrency is of great interests. Sars, the South African Revenue Service, want to track Bitcoin trades moving forward. They hope to achieve this goal by collaborating with technology companies. Whether or not this venture will be successful, remains to be seen. It is certainly a very interesting development in the world of cryptocurrency.
In South Africa, Bitcoin is slowly gaining popularity. That is only normal, thanks to this year’s spectacular price increases.At the same time, it also creates a problem for Sars. The agency is concerned over tracking Bitcoin trades to potentially deduct taxes from these profits moving forward. Regulators haven’t had an easy time when it comes to regulation or taxing cryptocurrencies whatsoever. It is evident there are some tax revenues to be collected sooner or later, though.
Sars Wants to Track Cryptocurrency Trades
Going about this process will not be easy. For now, Sars has to rely on the truthful disclosure by cryptocurrency traders. It is obvious this is not the best method for the agency whatsoever. Then again, there is no official Bitcoin regulation in place across South Africa as we speak. With the agency tracking Bitcoin trades in the future, things will certainly take an interesting turn moving forward.
Sars Group Executive for Research Dr. Randall Carolissen states:
“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. 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.”
For the time being, it remains to be seen how this situation will evolve. It is commendable to see the agency come up with creative ways to access this information they need. It doesn’t appear as if they will impose any additional regulations for exchanges or other service providers right now. That situation may still come to change in the future, but for now, things will remain the same. We may see some sort of Bitcoin regulation in South Africa before long. That wouldn’t necessarily be a bad thing either, although the opinions are divided on this front.
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