BD Insider: SARS turns to AI to chase tax evaders

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Newsletter

In this letter, we explore; South Africa’s tax authority targets crypto tax evasion, Ghana to get 5G network by November 1, South Africa introduces new visa reforms to attract skilled workers.

In this letter, we explore:

South Africa’s tax authority targets crypto tax evasion
Ghana to get 5G network by November 1
South Africa introduces new visa reforms to attract skilled workers

We also curated updates on startup funding in Africa, weekend reads, and several opportunities.

South Africa’s tax authority targets crypto tax evasion

South Africa’s tax man is turning to AI and machine learning to assist in tracking down individuals who are not declaring their crypto assets.

To enhance its enforcement capabilities, the South African Revenue Service (SARS) is collaborating with other regulatory bodies, such as the Financial Sector Conduct Authority (FSCA), and obtaining data from crypto exchanges. This allows SARS to monitor transactions and identify discrepancies between reported income and crypto holdings.

SARS is also offering taxpayers a voluntary disclosure program (VDP) as an opportunity to come clean about their crypto dealings without facing penalties. However, this option is only available to those who have not yet been identified for an audit.

The tax authority has emphasised the importance of voluntary compliance and the consequences of non-compliance. Taxpayers who fail to declare their crypto transactions face significant penalties, including up to 150% of the owed tax.

Context: South Africa has become a hot spot for crypto-related activities, boasting one of the highest Bitcoin adoption rates worldwide. SARS estimates that over 5.8 million South Africans currently own a crypto asset.

Overall, SARS's crackdown on crypto tax evasion sends a clear message to taxpayers that they must comply with the law.

Ghana to get 5G network by November 1

Nine years after introducing 4G, Ghana is set to officially launch its 5G network on November 1, 2024. The announcement was made by the country’s Minister of Communications and Digitalisation, following an earlier projection in March that 5G would be available by September.

Despite the delay, the government remains focused on boosting broadband connectivity nationwide. Its plans include raising 4G penetration to 80% over the next three years and building 4,400 combined 4G and 5G telecommunications sites.

To support these initiatives, the government has partnered with Radisys Corporation—a subsidiary of Mukesh Ambani's Reliance Industries Ltd—and created the National Ghana Infrastructure Company (NGIC). With a $145 million investment, NGIC aims to become the first entity to deploy a national 4G/5G network in Ghana. Other collaborators on the project include Nokia, Tech Mahindra, and Microsoft.

While MTN Ghana initially intended to pilot 5G in 2022, the partnership with Reliance Industries has sparked criticism from the opposition National Democratic Congress. They argue that a more competitive bidding process might have secured better terms for the country.

Zoom out: Ghana has also launched a free-roaming initiative with Togo and Benin which allows citizens of both countries to use mobile services in each other’s countries without incurring international roaming charges.

South Africa introduces new visa reforms to attract skilled workers

Following Kenya's introduction of a digital nomad visa, South Africa has introduced new visa reforms to attract skilled workers and foreign investment.

One of the key changes is the introduction of a Remote Work Visitor Visa, which allows high-earning foreign workers to live and work in South Africa while employed by overseas companies. This is expected to stimulate local businesses as these remote workers spend their income within the country.

Additionally, the government has implemented a Points-Based System for Work Visas. This system streamlines the visa application process and prioritises high-skilled professionals by requiring them to meet a minimum points threshold and earn a specified income.

These reforms are part of a broader effort to reduce bureaucratic hurdles, encourage investment, and create jobs. The South African government believes that attracting skilled foreign workers can significantly boost economic growth and development.

The Remote Work Visitor Visa is expected to have a positive impact on the South African economy by bringing in foreign income and supporting local businesses. The Points-Based System for Work Visas will also help ensure that the country attracts highly skilled professionals who can contribute to its economic growth.

Overall, these visa reforms are a significant step towards making South Africa a more attractive destination for skilled workers and foreign investors.

💰 State of Funding in Africa

Here’s a roundup of African startups that secured funding last week:

South African supply chain and logistics company TUNL has secured seed funding. Venture capital firm E4E Africa led the round, which included investors Jonathan Smit, Jozi Angels, and Utopia Capital Management. Existing investors 54Collective and Digital Africa Ventures also joined the round.
AMAKA Studio has secured $2 million in seed funding. Equitane (formerly the Africa Transformation and Industrialization Fund) led the funding round, which also included Morgan Stanley Inclusive Ventures Lab, Silverbacks Holdings, and a group of angel investors.