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Flash Briefing: SARS targets Bitcoin traders to shore up tax revenues; Ford invests in SA; record week for SA debt
MyBroadband reports that SARS has sent audit requests to taxpayers requesting them to disclose cryptocurrency trades and purchases.
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- Ford Motor Co. will plow $1.05 billion into a plant in South Africa — its biggest-ever investment in the country — as the carmaker scales back in other regions including Brazil and Europe, reports Bloomberg. The upgrades to the Silverton plant near the capital, Pretoria, will boost the site's annual capacity by almost a fifth to 200,000 units and create about 1,200 direct jobs, the company said in a statement on Tuesday. The outlay will support production of a new Ranger pickup truck starting in 2022, both for domestic sales and exports. The move comes after Ford said last month it will cease production in Brazil after a century of building cars there.
- Record demand at South Africa's weekly sale of government debt suggests the lure of relatively high yields still outweighs investors' concern about the country's fiscal path, says Bloomberg. Just weeks before Finance Minister Tito Mboweni's key budget presentation to lawmakers, primary dealers placed orders for R32.5 billion of debt ($2.2 billion), or 4.9 times the R6.6 billion on sale. That dwarfs the 3.7 bid-to-cover ratio at last week's auction, also a record. Mboweni's plan to curb government debt, set to peak at more than 95% of gross domestic product in 2026 according to government forecasts, will be put to the test by state-owned entities which still need funding, as well as the roll-out of coronavirus vaccines which will require a re-prioritization of already scarce funds.
- The South African government appears to be eyeing cryptocurrency profits as an additional way to build tax revenues, says Bloomberg. There are more than 3m traders in SA on one platform alone. MyBroadband.co.za reports that the South African Revenue Service (SARS) has sent audit requests to taxpayers requesting them to disclose cryptocurrency trades and purchases. This is according to Tax Consulting South Africa, which said it was recently approached by taxpayers who received this type of audit request. The request included standard questions related to the taxpayer's return, but also requested the following information: The purpose for which the taxpayers purchased cryptocurrency; A letter from the trading platform(s) confirming the investments and the relevant trading schedules for the period and bank statements. "This would have been reasonably expected by the taxpayers, if they had made any disclosure of cryptocurrency-linked trading amounts in their returns, along with the rental amounts and certain investments that were indeed disclosed to SARS," Tax Consulting South Africa said. "However, in this case, we had explicitly confirmed that the taxpayers had not, to their knowledge, ever effected a cryptocurrency-related transaction." The organisation noted that it is a criminal offence for a taxpayer to wilfully fail to submit data requested by SARS or to submit false information. "It is no longer material whether the taxpayer concerned had justification for such non-disclosure or false statement made," Tax Consulting SA is reported as saying.
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