Regulatory Body Created in South Africa to Tackle Issues in the Cryptocurrency Sector

In a bid to understand the crypto sector and impose a favorable tax structure the South African government has tasked a crypto assets regulatory working group with research responsibilities. The crypto asset working group will consist of various bodies from the government and are expected to table their report within this year.

The bodies are crypto assets regulatory bodies are SA Revenue Service (Sars), the Reserve Bank, Treasury, Financial Sector Conduct and lastly Financial Intelligence Centre. According to Tito Mboweni minister for finance, the government has tasked the above authorities to take care of challenges the government is currently experiencing. Some of the issues the body will cater for is to unite the intergovernmental regulatory framework and create a cohesive response from the government for the cryptocurrencies. The latter are responses from the finance minister to questions from MP Wouter Wessels from Freedom Front Plus party.

He explained further and said;

“We expect the various bodies and industry players making up the crypto assets regulatory working group to complete their research and table their report before us within this year.”

Government Working On Amendments

Although the above body is in place, the government is working on making amendments on the 2018 Taxation Laws. Inclusive in the amendments is the treatment of income tax and VAT purposes. Furthermore, the changes will also help bring clarity and get rid of categorizing virtual currencies as personal-use assets which attract capital gain tax. With the amendments approved digital coins will attract VAT and will be treated as financial services.

Besides the above according to Mboweni Sars is working on a proper way of helping taxpayers declare their profits made from the cryptocurrencies sector. The reforms will help taxpayers to report their profits accurately and get rid of the insufficient structures currently available. The current forms don’t provide any provision for taxpayers when they are declaring their earnings from the crypto sector. Once approved the amendments been proposed will get rid of the cumbersome structures in place. Although finance minister Mboweni comments were only responses to questions from the MP Wouter Wessels the government has set everything in motion. The crypto asset working group already has been given the go ahead. Besides doing their research on the cryptocurrencies sector the crypto asset working group will also do its research in the blockchain sector.