Latest news with #R540
IOL News
14-07-2025
- Business
- IOL News
South Africa risks missing out on millions in tax due to a lack of cryptocurrency regulation
Bitcoin has significantly outperformed Luno's assumptions. Image: AFP Half-a-billion rand. That's the minimum in extra tax the South African Revenue Service (Sars) could collect if local regulators made a single regulatory change and designated cryptocurrencies as an onshore asset. If digital assets, such as Bitcoin, were formally classified as an onshore asset, it would allow local asset managers more ease in creating exchange-traded funds (ETFs) tracking its price, opening access to investments in the digital currency to both retail and institutional investors. Against the backdrop of South Africa's sluggish economic growth, mounting debt and urgent social challenges, the increasing relevance of digital assets becomes both an investment opportunity and a potential source of tax revenue. South African founded Luno, which operates in more than 40 countries, has estimated through a conservative calculation that R540 million in tax revenue could be generated over five years. To arrive at the R540m figure, Luno assumed a slow adoption rate, and as little as 1% of institutional funds invested in a digital asset product such as a Bitcoin exchange traded fund (ETF). They applied conservative annualised returns and the relevant tax rates to reach the estimate. Given that Bitcoin has significantly outperformed Luno's assumptions, the actual tax revenue could be much higher. As the government is frequently seeking more sources of tax revenue, quick regulatory action on this front appears an easy win. ETFs are traded on stock exchanges and mirror the price of underlying assets such as currencies, commodities and metals, including gold, silver and platinum. Bitcoin fits naturally into this structure. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ But, because cryptocurrencies lack a formal designation as either onshore or offshore assets, asset managers remain reluctant to allocate capital to them or offer products such as ETFs that track Bitcoin. Much of financial institutions' 45% allocation limit for offshore investments is already absorbed by foreign stocks and other currencies. A simple onshore designation for digital assets could unlock vast new potential for both the asset industry and the fiscus. An onshore designation is also widely considered to be technically correct and best practice internationally. Bitcoin ETFs are neither obscure nor especially high-risk instruments. The basic principle remains: don't put all your eggs in one basket. Bitcoin ETFs are just another way to diversify portfolios and distribute risk more effectively. And over the past decade, Bitcoin has outperformed stocks and bonds on an absolute basis. According to StatMuse between July 10, 2015 and July 10, 2025, Bitcoin returned 41,261.3% and the S&P 500, a bellwether of the US stock market, returned 205.1%. This means R1 000 invested in Bitcoin in the early July 2015 would be worth around R413 613 a decade later, while R1 000 in the S&P 500 would return about R3 051. Bitcoin often behaves differently to equities and bonds, offering investors diversification and a way to earn returns on their money when their other investments are weaker. The cryptocurrency recently reached an all-time high of over R2 010 800, reflecting a more than 1 000% increase in just five years. Without regulatory clarity, local institutional investors are unlikely to capitalise on cryptocurrency returns, depriving the fiscus of the tax revenue that would otherwise be generated. Internationally, sentiment has already shifted. BlackRock, the world's largest asset manager, launched its own Bitcoin ETF in 2024 when US regulations permitted such. The Bitcoin ETF surpassed the value of the Bitcoin gold ETF, its previously largest and a long-time store of value In November 2024 and then became the fastest-growing ETF in US history, amassing more than $70 billion (R1.2 trillion) in assets under management by early June 2025. It grew five times faster than the fastest growing ETF, that held the previous record, tracking the gold price, owned by US bank State Street. In the UK, a pension fund made headlines in late 2024 by strategically allocating 3% of its portfolio to Bitcoin, signalling a fundamental shift in how mainstream finance views the digital asset class. South African regulations and financial regulators need to keep up with a changing cryptocurrency landscape. Recently, the Pretoria High Court found exchange control regulations from 1961 were not fit for purpose regarding cryptocurrencies and that with cryptocurrencies having been in existence for 15 years, it was time regulators caught up and accommodated them. Both a designation of onshore for cryptocurrencies and clearer exchange control regulations around cryptocurrencies are essential. Regulators cannot wish digital assets away or become so draconian, as happened in Nigeria, that trading in cryptocurrencies moved underground to unregulated peer to peer networks, away from any accountability. It's not just investors who stand to gain from clearer regulation. With transparent and fair rules, digital assets could become a robust new source of tax revenue, something South Africa desperately needs. At present, tax from digital asset gains remains relatively insignificant, because government policy hasn't kept up. The only thing that is keeping a cryptocurrency boost for the South African economy and fiscus is political will. Marius Reitz General Manager Luno: Africa and Europe Image: Supplied Marius Reitz is the General Manager Luno: Africa and Europe *** The views expressed here do not necessarily represent those of Independent Media or IOL. BUSINESS REPORT
IOL News
10-07-2025
- Business
- IOL News
Stubborn crypto rule costs SA half a billion in taxes
BlackRock, the world's largest asset manager, launched a Bitcoin ETF in 2024, which swiftly amassed over $70 billion (R1.2 trillion) in investments, making it the fastest-growing ETF in BlackRock's history. Image: Sunday Independent/Ron AI SOUTH Africa could generate at least R540 million in additional tax revenue by updating a single element of its cryptocurrency regulations to align with global best practices, according to an analysis by Luno, one of the world's oldest and largest cryptocurrency exchanges. The findings, shared in a media statement by Marius Reitz, Luno's general manager for Africa and Europe, highlight the untapped potential of digital assets in bolstering the country's strained fiscus amid sluggish economic growth and mounting debt. Reitz emphasised that Bitcoin and other digital assets have vastly outperformed traditional investments such as stocks and bonds over the past decade, yet South African institutional investors are missing out due to regulatory hurdles. 'Recently, Bitcoin reached an all-time high of over R2 010 800, showing over 1 000% growth in five years,' Reitz said. 'But local asset managers are restricted from offering products like Bitcoin Exchange Traded Funds (ETFs), which could unlock significant returns — and tax revenue.' Luno's 'conservative' estimate of R540 million in additional tax assumes just 1% of institutional funds flowing into a digital asset product like a Bitcoin ETF, factoring in modest returns and applicable tax rates. Currently, South Africa does not classify digital currencies as either offshore or onshore assets, creating uncertainty for asset managers. 'This makes it difficult for asset managers to offer products such as ETFs that track the underlying value of cryptocurrencies like Bitcoin,' Reitz said. 'If digital assets were designated as 'onshore' — as seen in other global markets — South Africa could harness this growth, leading to higher investment, profits, and capital gains tax for the fiscus.' The global trend is already proving the potential. BlackRock, the world's largest asset manager, launched a Bitcoin ETF in 2024, which swiftly amassed over $70 billion (R1.2 trillion) in investments — making it the fastest-growing ETF in BlackRock's history. Reitz pointed to international examples where institutional investors were increasingly integrating digital assets into traditional portfolios. 'Late last year, the first UK pension fund allocated 3% of its portfolio to Bitcoin,' he said. 'This marks a fundamental shift in how finance experts view cryptocurrencies — not as speculative assets, but as strategic investments.'
IOL News
10-06-2025
- Health
- IOL News
Mpumalanga mother awarded R540,000 after negligence leads to child's cerebral palsy
The mother of a little boy born with cerebral palsy, who was in a wheel chair up to his death at six-years-old, will get R540 000 in damages from the health authorities. Image: File The Mpumalanga MEC for Health has to pay a mother R540,000 in damages after her baby boy was born with cerebral palsy due to the negligence of the staff at a government hospital in the province. The mother initially claimed R4 million in damages before the Mpumalanga High Court, which was sitting in Mbombela. Her child had, meanwhile, died at the age of six, and the mother only claimed general damages on behalf of herself for the hardships she had to endure while looking after the child until his death. The court earlier ruled that the provincial health authority was liable for 90% of the damages the mother could prove she had suffered. The mother blamed the fact that her son was born with brain damage on the negligence of the medical personnel at the Embhuleni hospital. It was found that the negligence culminated in the child developing cerebral palsy due to a lack of oxygen at birth. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ The mother was admitted to the hospital in February 2017 to deliver her baby. Following her admission to the hospital, the plaintiff endured prolonged hours of labour. The result was that the then-unborn baby suffered foetal distress and brain injury, as a result of which he suffered permanent brain damage, disability, and cerebral palsy. In determining the amount of damages payable to her, various experts, including a specialist physician, a neurosurgeon, a physiotherapist, and an occupational therapist, gave their inputs to the court. The experts saw the child when he was five, a year before his death. It was noted that he could not communicate, and he was multi-disabled with severe intellectual impairment. He was unable to move independently, had to be fed by others, and was incontinent. The child was unable to lift his head when placed in a prone position. He could not sit, stand, crawl, or roll, and he was wheelchair-bound.
