As cryptocurrency is gradually gaining recognition globally, authorities worldwide are putting some restrictive measures in their respective region.
Local Media reported last week that the tax consulting body of South Africa was approached by some taxpayers with an audit request from the South African Revenue Service (SARS) requesting that the taxpayers reveal their cryptocurrency trades and purchases.
The SARS is an agency under the South African government in charge of revenue collection and ensuring that citizens comply with tax law.
Apart from the regular questions in an audit, the requests included additional questions like the reason behind the cryptocurrency purchase made by a taxpayer and a “confirmation letter from trading platform(s) confirming the investments and the relevant trading schedules for the period and bank statements.”
The report also warned taxpayers on the consequences of refusing to agree to the SARS requirements or submitting false information as it is termed a criminal offense. The punishment for such an offense will attract fine or two-year imprisonment.
Tax Consulting South Africa advised cryptocurrency traders in SouthAfrica to tread cautiously because It seems SARS is out to apprehend all cryptocurrency traders who fail to follow the new constitution. At the same time, those who haven’t bought cryptocurrency should reply to any audit request with discretion.
The team addressed taxpayers, saying, “While further cryptocurrency regulation is certainly on its way, and with the international Common Reporting Standards now in full swing, audit requests are still a primary weapon in SARS’ arsenal, and the walls are closing in on non-compliant cryptocurrency traders.”
They continued, “There is little doubt that SARS is pursuing non-compliant cryptocurrency traders, so it is best for these taxpayers to stay ahead of the curve and ensure that their tax affairs in order beforehand. While this is certainly a first, it is certainly the kind of approach by SARS that taxpayers should expect moving forward.”
While South African crypto traders are to submit an audit request to SARS, Nigerian crypto traders can no longer use their bank accounts for crypto transactions. As reported, the Central Bank of Nigeria (CBN) has banned financial institutions from offering crypto services to any individual.