South Africa Becomes the Sole African Nation to Adopt Crypto-Asset Reporting Framework

South Africa is the only African country to join the group of countries that have agreed to implement the Crypto-Asset Reporting Framework. According to the South African Revenue Collector, the reporting framework is expected to improve its “ability to ensure tax compliance and clamp down on tax evasion.”

Tax Transparency Standard

South Africa has joined more than 40 other countries and jurisdictions in agreeing to implement the so-called Crypto-Asset Reporting Framework (CARF), a statement issued by the country’s tax collector has said. Developed by the Organisation for Economic Co-operation and Development (OECD), the CARF is a tax transparency standard whose agreement was reached in March 2023.

According to a joint statement unveiled by His Majesty’s (HM) Treasury on Nov. 10, the agreement provides a basis for the “automatic exchange of information between tax authorities on crypto exchanges.” The goal of such an exchange is to combat offshore tax avoidance and evasion. The agreement also commits the 40-plus countries and jurisdictions to the simultaneous implementation of amendments to the Common Reporting Standard (CRS).

Meanwhile, in a statement explaining why South Africa has agreed to implement the CARF, the South African Revenue Service (SARS) argued that this is the only way the African country can keep up with developments.

“To keep pace with the rapid development and growth of the crypto-asset market and to ensure that recent gains in global tax transparency will not be gradually eroded, we welcome the new international standard on automatic exchange of information between tax authorities developed by the OECD – the Crypto-Asset Reporting Framework (CARF),” the revenue collector explained.

Combatting Crypto Tax Evasion

The revenue collector also argued that when widely and consistently implemented, the crypto reporting framework will improve its “ability to ensure tax compliance and clamp down on tax evasion.”

The SARS press statement revealed that the revenue collector is planning on “transposing the CARF into domestic law” by 2027. However, any such switch to CARF will be subject to national legislative procedures, the statement added.

So far, South Africa is the only African country that is party to the agreement while China and Russia are some of the notable omissions from the list of countries unveiled by the HM Treasury.

Register your email here to get a weekly update on African news sent to your inbox:

What are your thoughts on this story? Let us know what you think in the comments section below.

from Bitcoin News https://ift.tt/sEFum1Z