Digital assets have become a fast, borderless way to do business for many local entrepreneurs. From artists selling NFTs to small online retailers accepting cryptocurrency, the digital economy promises speed, inclusion, and innovation.
But behind the buzz lies a tax time bomb, the South African Revenue Service (SARS) has made it clear that digital assets are taxable, and failure to declare them could carry serious consequences.
SARS recently confirmed that income derived from digital assets, whether through crypto trading, mining, or the sale of non-fungible tokens (NFTs) is subject to normal income tax rules. NFTs, or non-fungible tokens, are unique digital assets recorded on a blockchain that represent ownership of original works such as digital art, music, or videos.
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Capital gains may also apply where profits are made through trading. Yet many small, tech-savvy entrepreneurs are unaware that their new business models now fall under these tax obligations.
South Africa has one of the continent’s most active crypto markets, with over 7 million users according to Luno’s 2025 report. Among them are small businesses experimenting with digital wallets and blockchain tools to reach global markets. Johannesburg-based designer Lebo Maphosa, who sells digital art on NFT marketplaces, says the appeal of crypto lies in its immediacy.
“With crypto, I can get paid instantly from clients abroad—no exchange delays, no bank fees,” she said. “But I only recently learned that I must declare that income to SARS. It’s confusing because there’s no clear system for it.”
Maphosa is not alone. Many microenterprises and freelancers see crypto payments as a modern solution to cross-border trade. But without proper tax education, these same tools can create compliance headaches.
SARS has warned that digital assets are not “tax-free zones.” According to the 2025 Draft Interpretation Note on Crypto Assets, businesses must include crypto income in their returns, valued in rand at the time of each transaction. Non-disclosure, SARS says, could result in penalties of up to 200% of unpaid taxes, plus interest.
Tax specialist Dr Mpho Ramaila from FinCom Advisory explains that this is where small businesses struggle.
“SMMEs are not trying to evade tax, they simply don’t understand how to record crypto transactions. Many don’t even have systems that integrate with blockchain wallets,” Ramaila said. “SARS is modernising, but small businesses are lagging behind.”
Recognising the gap, fintech startups are stepping in to help SMMEs navigate this new terrain. TaxBit Africa and ChainLedger SA, for instance, now offer crypto accounting tools that automatically convert transactions into rand values and generate tax-ready reports.
Sipho Nkosi, co-founder of a fintech compliance firm in Cape Town, says demand has grown sharply in 2025.
“We’re seeing more small businesses wanting to stay compliant but not knowing where to start. Our platform bridges that gap turning blockchain data into reports SARS can actually understand,” Nkosi said.
