The South African Revenue Services also known as the tax man has upgrade their systems or should I say they have joined OECD. They are going after crypto investors as they need the revenue more than ever. This is a new name for myself as it stands for Organisation for Economic Co-operation and Development who are a data company. They say that they are helping 100 countries building stronger, fairer cleaner societies and sounds like they are benefitting by sticking to this narrative as what does having data on crypto accounts have to do with this?
OECD has a system that has data on 123 million bank accounts (120 countries) worth over EUR 12 trillion (2022). The SARS website stated they are using AI to follow crypto investors and I do think this is not true and are using third parties for this specialized service. I may be wrong, but my gut tells me I am right as I know how these government agencies work in South Africa and investing is not something that goes hand in hand with how they work.
Yesterday I mentioned that SARS have been sending out nudge letters which is basically a notice they know about your crypto and you need to respond within 21 days. If you do not respond then you will be audited and that is not good news if you have left a trail for them to follow. They will not only do a lifestyle audit, but a full banking audit with the sole purpose of finding anything out of the ordinary so they can fine you plus paying back what you owe.
SARS has estimated a tax shortfall this year of R75 billion and are looking to target finding R70 billion leaving a final shortfall of R5 billion. We know the government is desperate for revenue with so many unemployed and a shrinking revenue, so digging deep into crypto with a bull market on the cards this could be a lucrative earner for not only investors ,but also the tax man.
This is actually all good news for myself as I have left very few footprints which are 7 years old and have made no more since. One would have to be a complete moron going in and out using local exchanges as we know they have an agreement in place and the crypto trigger figure was reduced from R10K down to R5K which is roughly $275 and not only in one transaction, but over the entire tax year. This figure of R10K ($550) was usually for a single transaction and is the big change for this tax year.
I have not received a "nudge" letter and do not expect to receive one so fingers crossed that remains the case. The cold wallet will be used later this year once my portfolio is sold and it will remain in the cold wallet until it hits the bank who will then receive the stable coins and transfer them into the bank account. This I am doing for a reason as there is no direct deposit from an exchange into a bank account leaving no online footprint. This has a cost for this type of service which varies so if anyone else is looking into this you must shop around for the best rates varying between 0.5% and 4%.