The South African Revenue Service (SARS) has launched a targeted crackdown on crypto tax payers who fail to declare income from cryptocurrency investments and trades.

According to Wiehann Olivier, Partner and FinTech & Digital Assets Lead at advisory firm Mazars, SARS has formed a specialized team to investigate under-declared income linked to digital assets such as Bitcoin and other cryptocurrencies.

Crypto Tax Payers Already Notified

Olivier revealed in an interview with Kaya FM that many taxpayers received letters at the end of last year. These letters demanded repayment of significant amounts due to unreported cryptocurrency gains and trading profits.

He explained:

“SARS has created a dedicated team to focus on this going forward, and we’re going to see more scrutiny on taxpayers who have under-declared their income in relation to blockchain-based digital assets such as cryptocurrencies.”

Widespread Under-Declaration

Official data shows a major gap between cryptocurrency ownership and tax compliance in South Africa:

• 500,000 taxpayers currently declare their crypto gains and losses.
• 6 million South Africans reportedly own cryptocurrency.

This suggests that millions of crypto holders are not reporting their earnings, prompting SARS to increase enforcement.

Olivier added:

“You can see there’s a clear under-declaration of gains in relation to cryptocurrency. And of course, this has resulted in SARS paying more attention to it.”

Voluntary Disclosure Programme for Crypto Gains

SARS is also considering including cryptocurrency-related income in its Voluntary Disclosure Programme (VDP).

According to Olivier, this move would allow taxpayers to come forward and declare previously hidden crypto gains while minimizing penalties. He noted that the tax authority views this as an additional revenue stream.