South Africa Constitutes Working Group to Explore Cryptocurrency Potential
According to a recent report on local news media Business live, the South African government has constituted a regulatory working group to evaluate the prospects of cryptocurrency and blockchain in the country. The crypto industry is exponentially growing in South Africa, and the growth has mandated the government to come up with some kind of regulatory framework to bring the digital coins under its purview.
Working Group for Cryptocurrency
Giving the details about the constituents of the working group, the Finance Minister of the country, Tito Mboweni revealed that the group has the representations from the Reserve Bank, financial sector conduct authority, financial intelligence center, treasury, and SA revenue service (Sars). According to Mboweni, this working group has been constituted in response to develop a unified response to the booming crypto industry in the country, in addition to creating a cohesive intergovernmental framework. The Finance Minister also stated that the working group is expected to submit its report in 2019 after consulting all the industry participants and taking their comments/feedback into account.
Concern for Tax evasion
The tax evasion by the crypto traders is one of the primary concerns of the South African government. Mboweni said that from the very next year, Sars would add the option of cryptocurrency in the tax forms to check any evasion. He further added that Sars is considering the amendment for 2019 tax forms to describe the “other assets” by adding a particular “description field” in the form.
Last year, the South African government amended the taxation laws to include cryptocurrencies for deducting income tax and VAT. The amendment proposed now will make sure that any loss incurred on the cryptocurrency will be offset against the profit only. The Finance Ministry also made it clear that the cryptocurrencies will be considered as financial services for VAT and not be treated as personal assets for the capital gains.
Crypto Fever in Africa
Just so you know, cryptocurrencies are increasingly becoming popular in the African Nations, including South Africa. To give you a sense of penetration, the African Bitcoin exchange named Paxful reported that in the last year the continent registered $40 million monthly trading which is huge by any standards of comparison. Commenting on the trading numbers, Rat Youssef, CEO of Paxful stated that they are quite confident that Bitcoin and other cryptocurrencies will become mainstream financial exchange system around the globe in the future. Like other technological innovation, Africa is also leading the revolution of this distributed ledger Technology, and the exchange is aiming to continue its partnership with customers to expand the access to global financial exchange system.