A South African tax expert, Thomas Lobban, has warned non-tax
paying crypto traders that they now face possible jail time if the South
African Revenue Services (SARS) decides to lay tax offense charges
against them. He adds that this threat of jail time similarly applies to
South African crypto traders that use offshore exchange platforms to
trade or store their crypto assets.
Lack of Guidance Blamed
Lobban’s warning follows reports earlier in the year which suggested
that changes to South African tax laws may have made it “easier for SARS
to secure criminal convictions for tax offences.” The warnings also
follow reports
in June which suggested that SARS had asked “independent South African
crypto platforms to provide it with information pertaining to its client
base.”
However, despite this dire warning, Lobban — a legal manager at a
local tax consultancy firm, Tax Consulting South Africa — admits that
many crypto traders are not aware of the extent of their tax
liabilities. The expert partly places the blame on SARS which he says
has not done enough to guide crypto holders. He explained:
The lack of any meaningful guidance from SARS has not
helped the situation either, leaving crypto investors with nothing more
than their own best guesses about the correct tax treatment to be
applied in each case.
Lobban also blamed what he calls “very strange beliefs about tax and
crypto-assets” as the other main reason why many crypto holders are not
paying taxes fully. He said due to these beliefs, many crypto traders
still think a tax liability only arises “upon withdrawal.”
South Africans Trading on Foreign Crypto Exchanges Also Targeted
The tax expert also notes that while SARS is seemingly “hesitant to
provide guidance on the correct tax treatment,” it has nonetheless been
working to improve its information-gathering mechanisms. It is such
mechanisms that the revenue collector hopes to use when pursuing South
African crypto holders that trade on offshore exchanges. Lobban said:
SARS can request the collection and provision of
information in relation to a taxpayer from other revenue authorities
globally, as well as request assistance in the collection of tax, in
terms of the many tax treaties it has in place.
In the meantime, Lobban urged South African cryptocurrency holders
and traders who are not sure of their tax obligations “to approach SARS
first and declare crypto profits and losses in their returns.” By doing
this, they stay in SARS’ good books and avoid sanctions.
For those with an outstanding historic tax liability, Lobban says
there are avenues for correction without the threat of criminal
liability. However, once SARS notifies them of an impending or potential
audit, options available to taxpayers become severely limited.
source link : https://news.bitcoin.com/south-african-expert-says-tax-dodging-crypto-traders-face-heightened-jail-threat/
