South Africa tightens crypto tax rules with mandatory SARS registration

The South African Revenue Service (SARS) is intensifying its scrutiny of cryptocurrency transactions, warning traders, exchanges, and intermediaries that failure to register with the tax authority now constitutes a legal violation, Commissioner Edward Kieswetter told Bloomberg in a recent interview.

The move signals SARS’ aggressive push to regulate the country’s booming crypto market, which has become a focal point for revenue collection efforts. Kieswetter stressed that registration enables the agency to track crypto-related business activities and curb tax evasion.

The crackdown comes as SARS reports record tax collections of R2.303 trillion ($122 billion) for the fiscal year ending March 2025, with net revenue reaching R1.855 trillion - surpassing government estimates by R8.8 billion. The commissioner attributed the growth to enhanced compliance measures, including advanced data analytics and AI-powered surveillance of bank accounts to flag discrepancies between taxpayers’ lifestyles and declared incomes.

"Technology has revolutionized our enforcement capabilities," Kieswetter said, noting that AI-driven tools now allow SARS to efficiently identify non-compliance without extensive manual reviews. Tax Consulting SA confirmed the agency is leveraging machine learning to analyze transactional data and build legal cases against evaders.

The crypto sector represents a key target for SARS as adoption surges in South Africa. With R448 billion refunded to taxpayers - an 8.2% annual increase - the agency aims to balance enforcement with fairness while closing loopholes in digital asset reporting.

Industry experts warn that unregistered crypto participants now face heightened risks as SARS deploys its full technological arsenal to ensure compliance.