The financial regulators, the governments and the responsible tax of the entire world are having difficulties to control the market of crypto-currencies. There are many shadows that are difficult to untangle on this network and Blockchain in particular. It is to solve this problem that the South African Revenue Service (SARS), the tax body of the country, is seeking help from high-tech firms around the world.
A risky bet
This initiative of the SARS could potentially open a Pandora’s box. In effect, the right to privacy is one of the key benefits offered by the transactions of Bitcoins. We know, for example, that in the United States, only 802 people have paid taxes on their earnings of Bitcoin during the month of September. And this phenomenon extends to other countries, because there is not yet case law to force people to reveal the details of their transactions.
A complex process
Usually, the SARS request to banks to provide information on the investments of their clients for verification purposes, but in the world of crypto-currencies, it is difficult to obtain this type of information. Dr Randall Carolissen, group executive director of research of the SARS acknowledges that it is currently studying all the options. “As you can imagine, the technology Blockchain is a very complex area. Without revealing too much, we are discussing with some of the largest technology companies in the world who are doing similar work in Canada and in the United Kingdom and South Korea, and we hope to get the same results.
As there is as yet no precedent on how to monitor transactions on this type of decentralized system, it will be difficult to submit the transactions of crypto-currencies to the tax regime of each country, including South Africa.
Source : Cointelegraph