SARS is coming after this group of 6 million South African taxpayers
Millions of South Africans who own cryptocurrency are being warned that they could soon find themselves in the sights of SARS.
This was the message from Wiehann Olivier, Partner and FinTech & Digital Assets Lead at Forvis Mazars South Africa.
According to Olivier, SARS has already begun issuing what he calls “love letters” to taxpayers who failed to declare their crypto gains.
“At the end of last year, there were a lot of taxpayers who actually received letters from SARS saying that they owe a significant amount of money due to cryptocurrency transactions or gains generated from trading,” 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 underdeclared their income in relation to blockchain-based digital assets such as cryptocurrencies.”
The scale of underreporting is clear when comparing SARS data with market research. “There are about half a million South African taxpayers who actually declare their gains and losses in relation to cryptocurrency,” Olivier noted.
“However, based on analytics and census data, there are just over 6 million South Africans who actually own cryptocurrency,” he added.
“So you can see there’s a clear under-declaration, and of course, this has resulted in SARS paying more attention because there’s extra revenue they can generate from these gains.”
The sums at stake are substantial. “The value and the volume of cross-border transactions, of even cryptocurrencies flowing from South Africa to foreign exchanges, is billions of rands every single year,” Olivier said.
“We’ve even had clients who’ve generated R100 million worth of gains in a single year. That’s a significant amount, and it shows why SARS is taking this so seriously.”
For those who have failed to declare gains in the past, Olivier stressed the importance of making use of SARS’ Voluntary Disclosure Program (VDP).
“The VDP is not specifically for crypto, but it’s an initiative that allows individuals to come to SARS and come clean on past gains they have not disclosed,” he explained.
“If you enter into a VDP with them and you disclose everything from the get-go, SARS will waive all penalties associated with late submission or underestimation. It’s a massive incentive for individuals to come clean based on past crypto gains.”
Penalties could be severe
However, he also warned that timing is critical. “If SARS starts to investigate you or you are already subject to an audit, you immediately lose the ability to enter into that VDP agreement,” Olivier warned.
“That’s why we always say to clients: if you want to come clean, it’s better to do it sooner rather than waiting for SARS to come knocking.”
The risks of ignoring SARS are severe. Some of the penalties can be up to 200% of your gains.
“That means everything you’ve made is gone. On top of that, you get taxed on the amount, and you could even face criminal prosecution for not declaring income tax. This is a very serious matter.”
Olivier also pointed to regulatory changes that will make it harder for individuals to hide undeclared gains.
“A draft position paper was just released on the information that crypto-asset service providers need to share with revenue agencies such as SARS,” he said.
“The level of detail these exchanges hold gives SARS a lot of firepower. Combine that with artificial intelligence sifting through vast datasets and linking information, making it difficult for individuals to hide under-declared income.”
Interestingly, a recent High Court ruling means the legal status of crypto under South Africa’s exchange control rules will remain unclear until the appeal is decided.
On 17 September 2025, the High Court granted the South African Reserve Bank (SARB) and Deputy Governor Nomfundo Tshazibana leave to appeal directly to the Supreme Court of Appeal (SCA) in the Standard Bank v SARB case.
The ruling suspends the High Court’s earlier order, leaving the legal status of crypto assets under exchange control unsettled until the appeal is heard.
SARB argued that crypto should fall within the definitions of “money,” “foreign currency,” or “capital” under the Exchange Control Regulations, urging a broad, purposive interpretation to prevent regulatory loopholes that undermine its mandate to protect the currency.
It added that the laws must be flexible to keep up with new financial technologies like crypto, otherwise people could use gaps in the law to move money illegally.
Standard Bank, however, maintained that crypto is not recognised as legal tender or foreign currency under current law, and any regulatory changes must come from Parliament, not the courts.
The SCA hearing is only expected next year, following the filing of notices, the appeal record, and heads of argument.
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