Govt to tax cryptocurrency as regulations take effect

The Financial Sector Conduct Authority (FSCA) said a crypto asset, which it referred to as "a digital representation of value", must be regulated in South Africa from the date of publication.  

This as a large number of people in South Africa are dealing in crypto, with other people using it to hide their assests.

Efficient Group Economist Dawie Roodt says there is still confusion as to what cryptocurrencies, and whether its money or not.

"Up until now there is still some confusion to what is cryptocurrencies are actually weather it is money or is it financial products what is it, nobody really knows but the reserve bank has decided that it should be categorized as financial products or financial instruments which means that it will be treated the same as for an example an investment and a share.

"So, if you buy Anglo share, for example, and you make a profit on that you will have to pay taxes on that, and it is exactly the same now that if you buy a crypto share you will have to pay taxes.

Roodt adds that it will be difficult for government to monitor ownership and the payment of taxes.

"It will be quite difficult for the government to make sure that all people do pay all the taxes that they are now supposed to pay on cryptocurrencies, and the reason to that is because of the nature of cryptocurrencies because they are encrypted and it is not always possible to determine who the actually owner is, and how much profit has been made which is the ideology reason why the assets were made."

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