Hey Jesscitizens
We all knew this day would come, COVID has left our economy in tatters, and with governments around the world making loans or printing money hand over fist to keep the debt bubble from imploding, they were always going to look at new forms of revenue.
Crypto had so far been off and to the side, a bunch of weirdos on the internet trading make-believe money online. Now in 2020 with Bitcoin continuing to rally governments all over the world are looking at this piece of the pie and rubbing their itchy palms at the thought of those tasty gains.
How crypto previously worked in SA
In the past, South African's were only liable for capital gains when the crypto was turned into Rands and deposited into your bank account. This made it easy to manage and makes sense; if you're moving back into fiat, you should be playing by their rules.
As FinTech and DE-FI begin to allow purchasing directly in crypto and loans and other financial services, bypassing the banks crypto users will find less need to move directly into fiat.
Now the rules have changed, and South Africa is moving to ALL crypto transactions becoming taxable events.
A tax disclosure obligation does not only arise where a cash balance is withdrawn from a trading platform – all transactions that have been made (whether a transaction of cryptocurrency for money or cryptocurrency for another cryptocurrency) must be disclosed to SARS.
What happens if you don't disclose your crypto trades?
This means that a taxpayer who fails to disclose their income from Bitcoin or other cryptocurrencies correctly may be convicted for an offence and be liable to a fine or imprisonment for up to two years.
This is pretty harsh if you think about many of these trades could be paper/unrealised gains in a market that is so small and filled with rampant speculation.
Probably only the beginning
I am sure as the number next to the BTC ticker moves higher and higher, governments are going to come down harder on cryptocurrency investors. Depending on the size of your bags, you may get away with paying a few pennies or having to consult a professional to reduce your tax burden.
Then for some who have really made off like bandits in any of the last bull runs, you may need to reconsider your status as a South African citizen.
I hate to make sweeping generalisations, but a large majority of cryptocurrency investors are primarily smart, young and pretty pissed off generation. They would hold very little allegiance to the nation if they had to choose between the country and their profits.
The harder they push these folks; the more will pack up and move, eroding the tax base even further.
Source:
Have your say
What do you good people of HIVE think?
So have at it my Jessies! If you don't have something to comment, comment "I am a Jessie."
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