by Terence Zimwara
South African tax consultancy firm Tax Consulting SA, has said the recent announcement by the central bank — that will start to regulate cryptocurrency in 12 to 18 months — has legal and tax implications for both crypto investors and organizations providing intermediary services. The firm, however, says the South African Reserve Bank (SARB) “will not interfere in the investment decisions made by crypto investors.”
According to a South African tax consultancy firm, Tax Consulting SA, recent revelations by the central bank deputy governor that his institution intends to regulate cryptocurrency in 12 to 18 months, means cryptos “will soon be regulated under the Financial Advisory and Intermediary Services (FAIS) Act.” This, therefore, means all organizations or individuals deemed to be providing intermediary or advisory services will be required to register as financial services providers with relevant bodies.
In a report shared with Bitcoin.com News, Tax Consulting SA predicts that as the next step, SARB will introduce know your customer (KYC) procedures and exchange control regulations. The consulting firm is, however, quick to point out that the South African Reserve Bank (SARB) “will not interfere in the investment decisions made by crypto investors.”
Instead, the central bank will issue the so-called “health warnings” and provide adequate protection to investors who are at risk of losing everything. While acknowledging that the SARB has not outlawed cross-border crypto trading and investment, the consulting firm insists that investors will still have to adhere to certain reporting standards.
The tax firm’s report in the meantime warned of possible tax implications that may arise which crypto investors must be aware of. The report states:
Another concern will be in relation to tax compliance, for example, as tax evasion will be much more easily detectable with transactions falling under the purview of the SARB’s Financial Intelligence Centre (FIC).
Once the regulatory framework is in place, non-compliance will be easier to spot and at that point, South Africa’s “wild west” crypto industry will be a thing of the past, the report concludes. Tax Consulting SA also warns that during this period prior to the introduction of the regulatory regime, “crypto investors [need] to ensure that they are up to date with their compliance obligations.”
Register your email here to get a weekly update on African news sent to your inbox:
What are your thoughts on this story? Let us know what you think in the comments section below.
Terence Zimwara is a Zimbabwe award-winning journalist, author and writer. He has written extensively about the economic troubles of some African countries as well as how digital currencies can provide Africans with an escape route.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
Central Bank of Brazil Confirms It Will Run a Pilot Test for Its CBDC This Year
The Central Bank of Brazil has confirmed that the institution will run a pilot test regarding the implementation of its proposed central bank digital currency (CBDC), the digital real. Roberto Campos Neto, president of the bank, also stated that this … read more.
Tony Hawk’s Latest NFTs to Come With Signed Physical Skateboards
Last December, the renowned professional skateboarder Tony Hawk released his “Last Trick” non-fungible token (NFT) collection via the NFT marketplace Autograph. Next week, Hawk will be auctioning the skateboards he used during his last tricks, and each of the NFTs … read more.
Check all the news here