Tax evaders are engaging in a risky game with Sars on cryptocurrency assets

<p>Tax evaders are engaging in a risky game with Sars on cryptocurrency assets</p> <p>A sure-fire technique for Sars to determine whether or not something is wrong is to examine someone's lifestyle.</p> <p>During a recent panel discussion at the 2021 South African Institute of Taxation (SAIT) Tax Indaba, crypto assets and their taxation came up as a touchy subject for industry professionals once again. Mark Kingon (former acting Sars Commissioner), Keith Engel (CEO of SAIT), Creag Sudding (Associate Director at KPMG), Jacques van Wyk (CEO of JGL Forensic Services), and Jerry Botha were the five people present for the virtual debate (Managing Partner at Tax Consulting SA).</p> <p>When discussing the complexities of investigating tax evaders through lifestyle audits, Jacques van Wyk was quick to point out that the introduction of crypto assets has complicated the investigative process on a forensic level, as it challenges tax jurisdictions, which is akin to policing a borderless world.</p> <p>While Van Wyk is in favour of crypto taxes, he believes that the public is ignoring Sars' warnings. He asked Sars to leverage their data and set the appropriate precedents, nudge those who are purposefully non-compliant to reconsider their stance on the topic.</p> <p>The advantages and disadvantages of data collection</p> <p>The advent of the digital age demonstrated that we now live in a data-rich environment. While anything can be tracked, information may also easily vanish. Tax evaders and career criminals have worked tirelessly to devise methods of evading revenue agents.</p> <p>With access to a wealth of third-party data, Sars can monitor the yacht and aircraft fleet, as well as credit card activities and overseas assets. They can acquire access to an individual's offshore transactions through mutual information sharing agreements with other governments.</p> <p>However, crypto asset analysis goes beyond the investigation of third-party data. The digital data surrounding cryptography is thick and sophisticated, req