The South African Revenue Service (SARS) has intensified its efforts to enforce tax compliance on cryptocurrency holdings. The tax authority is now demanding that taxpayers declare their digital assets, following a similar move by the Federal Internal Revenue Service (FIRS) in Nigeria.

According to SARS, over 5.8 million South Africans own crypto assets, yet many have failed to report their holdings in their tax filings. The tax authority is collaborating with the Financial Sector Conduct Authority (FSCA) to gather information on registered crypto asset service providers and directly from local exchanges.

SARS Commissioner Edward Kieswetter has stressed the importance of tax compliance, warning that those who evade paying taxes are burdening honest taxpayers and limiting the government’s ability to provide essential social services.

SARS is actively exchanging information with other tax authorities worldwide to track the activities of crypto investors and ensure compliance.

To enhance its ability to enforce tax compliance on crypto assets, SARS has invested in advanced technologies like artificial intelligence and machine learning. These tools will help the tax authority analyze data and identify potential non-compliance cases.

The FSCA has been actively involved in regulating the crypto market in South Africa. The authority has issued guidelines for crypto asset service providers, conducted investigations into unlicensed entities, and approved licenses for qualified businesses.

The South African government’s crackdown on crypto tax evasion highlights the growing importance of regulating the digital asset market. As the crypto industry continues to expand, it is crucial for investors to comply with tax laws and regulations to avoid penalties and contribute to the country’s economic development.