SARS commissioner Edward Kieswetter.
The South African Revenue Service (SARS) is calling on social media influencers to declare their earnings, warning that income received in cash, products or services is taxable under the Income Tax Act (ITA).
This comes as the country sees a surge in influencers, driven by expanding digital connectivity and the rise of platforms such as Instagram, TikTok and YouTube.
Brands are increasingly turning to influencer marketing as a cost-effective way to reach targeted audiences, boosting the size and visibility of the sector.
In a statement issued today, SARS says it has taken note of the public debate around the taxation of influencers.
“SARS wishes to clarify its position with respect to this category. SARS’s legal mandate is to collect all revenue that is due to the State, improve tax compliance, and facilitate legitimate trade.”
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The revenue service explains that it is expanding its taxpayer segmentation model, which already covers standard taxpayers, large businesses, high-wealth individuals, public benefit organisations, estates, and employers.
“The latest additions to this segmentation model are national and provincial government; social influencers; and the gig economy.”
It describes social influencers as “modern entrepreneurs, who can be classified as sole proprietors or independent contractors” — technologically savvy individuals who leverage their online following to create commercial opportunities.
SARS says cases will be assessed individually and many influencers may fall into the provisional taxpayer category, depending on their income.
“Undeniably, digitisation and attendant economic activities have fundamentally changed the world of work, and the gig and sharing economy are critical in this respect,” the tax authority notes.
It adds that with traditional marketing budgets shifting from agencies to personalities with large followings, SARS is adapting its compliance and education programmes, rolling out products, videos, webinars and rulings to assist influencers.
“Full voluntary disclosure is critical. No matter how social influencers are remunerated — whether with products, services, or travel — all of these are deemed as income (ITA) and must be taxed accordingly. In line with our compliance theory, SARS believes that taxpayers are honest: when they are clear and certain of their obligations, they comply voluntarily. SARS believes that social influencers will declare honestly when adequately educated,” the statement reads.
Commissioner Edward Kieswetter says: “SARS is looking forward to working with this segment to provide clarity and certainty, but also to provide them with a seamless taxpayer experience. SARS is more than willing to assist honest taxpayers to comply with their tax obligations. I am reminding social influencers to uphold their end of the bargain.”
