South Africa Revenue Service Delving Into Blockchain Tech for Tax Declarations

Aug 25, 2018 at 12:41 // News
Author
Coin Idol
South Africa Delving Into Blockchain Tech

Crypto continues to garner a lot of interest in South Africa (S.A), particularly taking into account the recent news of government corruption and land expropriation. Citizens are comprehensively worried about the future of the country's economy and are searching for alternative means to store wealth.

Because of the level of known investment in Cryptos, the South African Revenue Service (SARS) is worried it may not be receiving it's cut of the pie. As transactions on distributed ledger technology are technically transparent, it's very easy to conceal them in case nobody is seeing.

The Double-Edged Sword System

Consequently, SARS is investigating a distribution ledger technology (DLT) solution that will aid in guaranteeing nationals are paying tax on their Crypto income. Although SARS has noted that it doesn't deem Cryptos such as Bitcoin, Ethereum, Ripple, Coinpesa as real currency it still needs nationals to settle tax on them as if they are.

Up to now, it has been depending on nationals to honestly declare their Crypto earnings but with the service has realised it doesn't completely trust South African citizens to do this. The new method will come as a thunder though, as it implies investors can also announce their losses and thus significantly get a tax holiday.

DLT, a Solution to Financial Services

Mark Kingon, SARS Commissioner, mentioned this about the new system:

“The key thing is identifying people who are trading because it’s easy to say cryptocurrency gains must be deductible, but there are also those who lose,” he said.

Richard de Sousa, from AltcoinTrader, an S.A Crypto exchange, also revealed that:

“If SARS knew the Bitcoin address that you started from, they could track every single transaction that goes out of that address.” he pointed out. “Crypto is not secretive it is extremely transparent.”

Several countries have already considered implementing DLT as an answer to tax and other important financial services, with varying degrees of success. Taking into account the troubles SARS has by this time faced this year vis-à-vis internal management, it will be more absorbing to observe this succeed.