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The South African government has set up a regulatory work group on crypto assets to investigate cryptocurrencies and blockchain concepts.
In a letter to Parliament, Tito Mboweni, South Africa's finance minister, said that the working group was set up to develop a unified intergovernmental regulatory framework across the country. The group also has the task of developing a cohesive government response to cryptocurrencies and technologies that surround the economy.
In his letter, Mboweni stated that the working group includes representatives of the Financial Sector Authority, the Financial Intelligence Center, the Treasury, the Africa Revenue Service (SARS) and the Reserve Bank.
Mboweni also added:
"It is expected that, following the commentary and participation of the sector, the cryptographic resources regulatory working group will be ready to publish a final research paper on the subject in 2019."
The minister and the former governor of the South African Reserve Bank also explained to Parliament that last year SARS was going through a difficult period in carefully tracking the amount of capital gains and losses declared on cryptocurrencies. This is due to the fact that current tax forms do not have provisions allowing taxpayers to declare capital gains in cryptocurrency. However, Mboweni has stated that efforts are underway with SARS to make changes to tax forms for the fiscal season of 2019. The changes will provide a field of specific description of other resources, including cryptocurrencies, in the form.
The current amendment to the law on the taxation of the 2018 laws provides details on how cryptocurrencies should be treated when it comes to the presentation of VAT and income tax in the country. The amendment proposed by Mboweni will further clarify and improve the efficiency of the tax system in South Africa. In conclusion, Mboweni added that the proposed changes would explain whether cryptocurrencies may or may not be classified as assets for personal use or capital gains tax.
The cryptocurrency community in South Africa has grown tremendously according to a July poll conducted by Old Mutual, a pan-African financial services company. In their relationship, 38% of South Africans want to have made an early investment in the crypt. In another poll, about 70% of people in South Africa believe that cryptocurrencies are an investment opportunity, with the majority already holding long-term cryptography. With numbers increasing day by day, Mboweni and the government believe it is time to create adequate regulatory structures for the industry.
