Intro: A South African tax consultant Thomas Lobban has warned all the crypto-traders about the taxes that they need to pay to SARS. Failing to do so will result in a jail sentence if the tax offences are laid down by the SARS against them.
Thomas Lobban is a South African tax expert. He has warned all the crypto-traders might face a jail term if the South African Revenue Services (SARS) decides to pay tax offence charges against them. The traders from South Africa will also likely face jail terms, who use offshore exchange platforms to trade or store their crypto assets.
His warning followed reports earlier this year that suggested changes to the Tax Laws in South Africa. It will make it easier for the SARS to take convictions of criminals for tax offences.
LACK OF GUIDANCE
The warnings also followed reports in June which showed that SARS had asked independent South African Crypto platforms to give information about its client base. Lobban is a legal tax consultant in South Africa.
He informed that many crypto players are not aware of the tax liabilities they have. He along with the other experts said that the SARS should have done enough to educate these taxpayers about the tax and should properly guide the crypto holders.
The lack of guidance from the SARS has left many crypto holders with nothing but mere guesses about the correct tax treatment to be applied in each case.
He further reiterated that the crypto holders have a very strange belief in tax and crypto-assets. They believe that many crypto traders still think that a tax liability only arises upon withdrawal. This along with other such beliefs are the reasons that many crypto holders are not paying taxes fully.
IMPROVE THE WORKING MECHANISM
Lobban also believes that SARS should get its act proper by focusing on its working mechanism. Currently, SARS is hesitant to guide the correct tax treatment. It is nonetheless working on improving its information-gathering mechanism.
It is such a mechanism that the revenue collector hopes to use when pursuing South African crypto holders that trade on offshore exchanges.
SARS can collect information about the taxpayers from other revenue sources globally. They can also request assistance in collecting tax, in terms of the many tax treaties it has in place.
Meanwhile, Lobban suggested taxpayers approach SARS and understand the amount that they have to pay as taxes. He requested the traders and holders of cryptocurrency who are not sure of their tax obligations to get help from SARS first and declare crypto profits and losses in their returns. This way, traders will stay in SARS ‘good books and avoid sanctions.
He also advises those who have a good tax liability history, there are ways to correct themselves without the threat of criminal liability.