Reports from South Africa indicate that the tax authorities have plugged the loopholes in the online tax declaration system, which enables crypto arbitrage traders to make multiple purchases on overseas cryptocurrency platforms with only one approval. Due to these adjustments, crypto arbitrage traders are now forced to create a new application to place orders. In addition, this change effectively excludes daily arbitrage transactions.
As explained in the report of the publication Moneyweb, it is well known that some South African cryptocurrency traders “profit from the difference in the price of crypto assets between local and overseas exchanges”. In recent months, the price difference has ranged from 0% to 3%.
However, according to the report, South African cryptocurrency traders can use their annual foreign investment allowance (FIA) of nearly US$700,000 (10 million rand) to take advantage of this difference. They can also use a special discretionary allowance (SDA) of approximately $70,000 per year to profit from these price differences. However, traders who use FIA allowances need to obtain a tax permit from the South African Revenue Service (SARS).
Once the preliminary approval is obtained, cryptocurrency traders will be able to “get subsequent approvals by going online and clicking the Pin’refresh’ button on the Sars website.” However, SARS has now updated its e-filing system and now “clicks the refresh button every time.” , Pin remains unchanged”.
Changes affecting transaction frequency
At the same time, Moneyweb’s report further showed that Valr, a South African cryptocurrency exchange, has notified its customers of these changes. Val said:
This means that the updated FIA Pin will not be accepted as a valid Pin for arbitrage transactions, and once the original FIA Pin is used up, a new FIA application will be required to conduct further arbitrage transactions under the FIA.
In addition, the chief executive of the exchange, Farzam Ehsani (Farzam Ehsani) was quoted as warning customers that they now need to “wait for each FIA application to be approved before trading.” However, Jon Ovadia, the CEO of cryptocurrency broker Ovex, was also quoted, refuting concerns that changes to the electronic filing system will affect his company. He says:
We have never used an automatic Pin map update system, because we know that Sars does not like this system [even though it made it available to the public].
How do you see the changes brought about by SARS? Tell us what you think in the comments section below.
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