SARS coming after influencers in South Africa

SARS is looking to recover over R500 billion in unpaid taxes made from online content creation, with experts warning that many South Africans who use social media may not even know they owe the taxman.

The South African Institute of Taxation’s Acting Deputy CEO, Keitumetse Sesana, explained on Newzroom Afrika that SARS is fully capable of recovering over half a trillion rand in tax debt, if not more.

“We need to go back to the basics when it comes to taxation,” Sesana said. “In the early 2000s, South Africa moved to the residency basis of taxation.”

This means that everyone deemed to be a South African tax resident, as per section one of the Income Tax Act, must pay tax in the country.

“Every single rand and cent that you make, save for a couple of exemptions, is taxable here in the country in which you reside,” Sesana explained. This includes any income social media influencers make from brand deals, whether it is locally or internationally.

“Every rand and cent falls within your gross income calculation into your taxable income, and SARS can rightfully collect that money.”

According to Sesana, SARS can collect even more than R500 billion from its influencer crackdown project. There are a number of low-hanging fruits, such as the digital content creation industry, where the right amount of tax is not being collected.

She referenced some recent conversations the South African Institute of Taxation had with SARS, where the taxman estimated the gap to be between R400 billion and R800 billion. “SARS is out to collect the right amount of tax,” Sesana warned.

Many South Africans are salaried employees, which means that their employers automatically deduct their pay-as-you-earn tax (PAYE).

However, for South Africans who participate in more non-conventional forms of employment and side hustles, such as online content creation, the situation is more complex.

Influencers enter the taxman’s radar

Sesana explained that the side hustle digital economy is something that even international organisations like the Organisation of Economic Cooperation and Development (OECD) are still trying to grapple with.

“People who work in this digital economy do not have their taxes deducted from their salary and paid over, as is the case with normal South Africans,” she said.

“So, we’re trying to level the playing field in these cases because we’re trying to tax the digital economy,” Sesana added.

While there has been a global effort to address the tax avoidance of mega corporations, the influencer economy has not yet received the same attention.

“But influencers are slowly coming onto the radar here because they’re earning monies that are not being declared, and it is not equal for a salaried employee to pay tax, but they’re not paying tax,” she said.

According to Sesana, the aim isn’t to force these individuals to pay more than normal workers, it is simply to ensure that they pay the correct amount of tax.

Part of what makes this so difficult is just how quickly someone can start earning money from social media.

Someone may start by simply creating some funny content or videos of themselves dancing in their homes with no intention of anything coming from it.

However, before they know it, they could have a barrage of followers and brands knocking on their door with offers that seem too good to resist.

On top of this, since many influencers are young, they likely have no idea what their tax obligations are.

Sesana stressed, though, that all of the income someone makes from a brand deal is part of their gross income, and therefore must be declared and paid over to SARS.

Importantly, influencers do not only owe SARS when they were paid in cash. If a brand paid them “in kind”, that must also be paid to the taxman.

For example, if an influencer is gifted a vacation by a brand, the value of that stay also has to be declared to SARS.

No hiding from SARS

Sesana warned that there is no hiding from the taxman since they can see the money influencers make from brands.

SARS Commissioner Edward Kieswetter has taken a “whole-of-government approach” to tax compliance. This means the taxman can see everything in a taxpayer’s bank account.

If a taxpayer’s cash, receipts and accruals do not align with what they have declared to SARS, assessments, audits, and verifications are conducted.

SARS has also employed highly technically skilled people and highly competent AI algorithms, which are really good at detecting tax non-compliance.

Even if a taxpayer doesn’t declare anything, SARS can directly deduct the money they are owed from their bank account. Penalties and fines will likely follow as well.

Sesana urged online content creators to consult with a registered tax practitioner who can help them register with SARS and get their tax affairs in order.

“It would be imperative for salaried employees and content creators to all assess what their liability is and just pay the right amount of tax so that SARS can lessen that tax gap,” she said.

As the Minister of Finance has expressed, if SARS collects everything they are owed, there may be no need for a tax increase in 2026. “So it is all in our interest to pay the right amount of tax and seek the proper advice,” she said.

Tax obligations for online content creators

Sesana said that these individuals will likely be classified as provisional taxpayers. This means that they need to declare their total estimated taxable income on their provisional tax returns (IRP6) and pay the applicable tax thereon.

For example, they may declare that they expect to earn R60,000 from a brand deal in the tax year, which they then pay upfront in February and August, and possibly top up for a third time during the year.

If it turns out that they have paid too much to SARS, they will refund the money, likely within 72 hours.

“But you have to register, and you must realise that any cash or anything in kind falls within that gross income definition. And if you’re a resident of South Africa, you have to pay it,” she said.

To determine which tax bracket they fall under, content creators can refer to the SARS website, which will guide them on which rates apply to them.

Sesana added that there is currently a draft tax proposal on the table, section 20A, which proposes ring-fencing side hustles specifically.

Section 20A of the Income Tax Act prevents individuals from offsetting losses from certain trades (often hobbies or “suspect trades”) against other income, such as salaries.

Instead, these losses are “ring-fenced” and can only be carried forward and set off against future income from the same trade.

The rule was introduced to stop taxpayers from disguising private consumption as business activity to reduce their overall tax liability.

“Usually, that was to ring-fence the losses for higher-income earners,” Sesana explained. “But Treasury is reducing it.”

“So even if you’re in the 39% tax bracket and lower, that middle class that’s doing all these additional side hustles and brand content creation wouldn’t even be able to set off their losses anymore. The threshold is now much, much lower.”