TechCabal Daily – Evading crypto taxes? Bad idea

In partnership with Lire en Français اقرأ هذا باللغة العربية Good morning! A new stream of searches for the Meta ray-ban glasses has been driving up the popularity of the hardware. While people are rediscovering the Meta Ray-Ban glasses—that first released in October 2023—for its 12 MP ultra-wide camera and integrated AI support for people with low vision, another Meta technology, the Quest 3S, gave the tech community more to ponder. Designed to blend the real world with the digital world, the new Quest 3S VR headset offers a better in-game experience as it uses the same chipset as the earlier-released Quest 3. On the Snapdragon XR2 Gen 2, load times and processing speeds are faster, yet, one noticeable flaw, according to tech reviews, has shown that Meta used the inferior lenses on the Quest 2 to cut corners on display quality. However, the Quest 3S is cheaper. Perhaps this is the price you pay for affordability? For $200 less, it looks like it. Meta is just another leap closer to sitting atop the throne in its hot pursuit of capturing major market share in the $4.4 billion mixed reality market. Crypto tax evaders in South Africa could face jail time Inside Kenya’s push for interoperability Cardoso says Nigeria is in a monolithic economy The World Wide Web3 Jobs Regulation Crypto tax evaders could face jail time, says SARS Image Source: Google South African Revenue Service (SARS) has warned crypto holders and traders that they could be penalised, or worse, face jail time for failing to declare crypto assets on tax returns. The tax collector confirmed it has teamed up with the Financial Sector Conduct Authority (FSCA), the financial markets regulator, to get information on asset holdings from local exchanges. While exchange platforms like Luno have stated that “it shares specific client data only with third-party service providers,” it could still be compelled to share information with persistent regulators in South Africa where it received a Virtual Asset Service Provider (VASP) licence in April. This could spell big trouble for anybody caught underreporting their crypto assets under the country’s Voluntary Disclosure Programme (VDP) where citizens report their taxable incomes. While crypto has previously been the dark horse of financial assets, regulators across Africa are starting to realise that there is a high rate of tax non-compliance due to the anonymity of crypto. Since it was not regulated, the government couldn’t tax it; people moved their holdings to crypto and those who had the means, mined more crypto without tax consequences. South Africa joined the top thirty countries globally with the highest crypto uptakes. In South Africa, the move to tax crypto started in 2018 after the regulator released a statement to tax crypto under income taxes. The country uses a progressive income tax rate, which has been adjusted throughout the years. Depending on the annual income, taxpayers pay a minimum of 18% on declared assets, and up to 45% in taxes. They earn back R17,235 ($980) through primary rebates. So, if a citizen declares R1,000,000 ($56,850) on their crypto assets, they’d pay R292,884 ($16,650) in income taxes. Other African countries like Nigeria, and recently Kenya, have announced plans to tax crypto users as they continue to find ways around formally regulating crypto. While it is still unclear whether these African countries are ready to regulate crypto as a legal financial asset, Kenya will choose an automatic approach, compared to South Africa, to tax crypto traders in real-time across every transaction. 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In 2018, the Central bank of Kenya (CBK) implemented the interoperable person-to-person payment systems, allowing customers to seamlessly transfer funds between different banks. The CBK further enhanced interoperability in 2022 by enabling seamless merchant payments. While the bank might have made solid progress by linking multiple local banks and merchants, there was no single payment system that connected multiple payment channels. In February 2024, the regulator began talks with industry players on a new payment system and to develop a Fast Payment System (FPS) that will allow instant transactions across all financial institutions, including banks and payment service providers (PSPs). While the CBK is yet to announce the date for the launch, many are questioning why the CBK is opting to build a new system instead of enhancing the existing Pesalink platform. Implementing a new real-time system could take a few years. Critics also argue that investing in and improving Pesalink would be a more efficient and cost-effective approach to achieving nationwide interoperability. Another blocker facing the establishment of the FPS is that there has been a lack of cooperation and goodwill among key players. Safaricom, the dominant mobile money provider, has been particularly vocal in criticising regulators for allegedly favouring rival companies through their push for interoperability.  Issue USD and Euro accounts with Fincra Whether you run an online marketplace, a remittance fintech, a payroll, a freelance platform or a cross-border payment app, Fincra’s multicurrency account API allows you to instantly create accounts in USD and EUR for customers without the stress of setting up a local account. Get started today. Regulation Cardoso says Nigeria is in a monolithic economy, the reforms are working Image Source: Andertoons Olayemi Cardoso, Nigeria’s central bank governor, in a fireside