South Africa and 47 Other Countries Commit to Adopting Global Taxation Standard for Digital Assets by 2027
South Africa has recently joined a coalition of 47 countries that have made a commitment to implementing a new global taxation standard for the digital asset industry by the year 2027. The countries and jurisdictions involved in this initiative include the United Kingdom, the United States, Mexico, Germany, France, Canada, Brazil, and Singapore.
This global standard, known as the Crypto-Asset Reporting Framework (CARF), was developed by the Organisation for Economic Cooperation and Development (OECD) and enables the automatic exchange of information related to taxes for crypto-assets. The CARF falls under the OECD’s mandate under a G20 mandate to develop a global framework for the easy and automated exchange of tax-relevant information to prevent tax evasion.
Regulators worldwide have faced challenges in taxing digital assets due to their complex nature and the involvement of non-traditional entities such as exchanges and peer-to-peer transactions. This complexity often exceeds the expertise of tax authorities.
A report revealed that over 99% of digital asset traders did not pay taxes in 2022, signaling a significant gap in tax compliance.
The adoption of the CARF by South Africa is seen as an opportunity for the country’s tax authority, SARS, to improve its ability to curb tax evasion. The members of the coalition have expressed their intention to integrate the CARF standard into their domestic laws by 2027 to further improve tax compliance and clamp down on tax evasion.
While South Africa is the only African country to pledge to transpose the new standard into domestic law, other African countries have struggled with digital asset taxation. For example, in July, Kenya implemented a new taxation regime that levies a 3% tax on all digital asset transactions, including NFT transfers, leading to pushback from the country’s blockchain ecosystem.
The Blockchain Association of Kenya has criticized the central bank’s anti-bitcoin stance, which has resulted in banks denying services to digital asset traders, making it difficult to pay taxes. This, in turn, has led to discontentment regarding the excessive taxes imposed.
### News source: coingeek.com