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South African Crypto Holders Urged to Approach Tax Body Before It Descends on Them

Cryptocurrency
19.05.2021
43
South African Crypto Holders Urged to Approach Tax Body Before It Descends on Them

A South Africa-based tax expert, David Lesperance, says with the country’s revenue collector now closing in on cryptocurrencies, holders must now take the initiative and approach South Africa Revenue Services (SARS) before it descends on them. Lesperance argues that by making the first move, cryptocurrency investors will be able to avoid the punitive penalties that SARS often imposes on tax dodgers.

Crypto Taxes Inevitable

In the meantime, Lesperance, in remarks that were made during a call with Bitcoin.com News, urged crypto holders to get over “the fantasy that they are not going pay taxes.”

Also, in his message aimed especially at early crypto adopters, the tax expert explains how features of the public ledger work in the favor of revenue collectors like SARS. He said:

Cryptocurrency based transactions are a revenue collector’s dream because everything is on the public ledger whose data cannot be changed.

Lesperance, who recently delivered a presentation at a recent tax webinar, adds that because public ledgers are censorship-resistant, the revenue collectors’ “only” task would be to identify holders of the crypto assets. This task, according to the tax expert, is made easier by cryptocurrency exchanges as well as token issuers who “will give up their clients” when asked to by SARS.

The Distinction Between Early Adopters and Family Offices

Meanwhile, the expert suggests that early crypto adopters may have to follow in the footsteps of family offices that specialize in managing the wealth of high net worth individuals. According to Lesperance, these family offices understand why their clients must pay taxes even on gains made from crypto investments. Nevertheless, before paying the taxes, these family offices will seek expert advice from tax professionals. These professionals will in turn secure the best tax rate for their clients.

In his closing remarks, Lesperance, who has been receiving many inquiries from crypto investors, says South African crypto holders will have to spend money in order to minimize their tax liabilities.

Do you agree will the assertion that all crypto-asset holders need to declare their holdings to tax collectors? Tell us what you think in the comments section below.

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