Free trips, PR packages and brand deals are now firmly on Sars’s radar: social media influencers must declare these perks as taxable income, the revenue service confirmed on Friday
The SA Revenue Service (Sars) has confirmed that social influencers will now fall under its taxpayer segmentation model, a move that signals a clear intention to tighten oversight of income earned through digital platforms.
In a media statement released on Friday, the tax authority said it has “noted information circulating in public regarding taxation of social influencers” and sought to clarify its position.
A social influencer is typically someone with a substantial online following who monetises their reach by partnering with brands, creating sponsored content, or promoting products and services. Sars said these activities constitute work in the same way as freelancing or contract employment.
This activity has become so popular and lucrative some are making serious money and a living out of it.
The tax authority’s view is that since influencers are benefiting financially — whether through cash payments, free products, services or travel perks — they should also contribute to the fiscus, like any other taxpayer.
Barter deals also taxable
Forvis Mazars’ national head of taxation services, Mike Teuchert, explained that even in a barter arrangement — for example, exchanging a social media post for goods — the fact that no cash changes hands does not relieve taxpayers of their obligations.
“If people are being paid in kind, or in services or goods, they need to contemplate that they will also have to be able to accumulate cash to pay the tax,” he said.
Sars stressed that its legal mandate was “to collect all revenue that is due to the state, improve tax compliance and facilitate legitimate trade”.
While the agency’s compliance approach is built on voluntary co-operation, the announcement makes it clear that influencers — often regarded as modern entrepreneurs — must ensure their financial affairs are in order.
Influencers treated like entrepreneurs
“The segment of social influencers is composed of modern entrepreneurs, who can be classified as sole proprietors or independent contractors. These are technologically savvy individuals who have identified a niche in the market to provide a generalised offering that leverages their social following,” the statement read.
Sars said influencers would be managed on a case-by-case basis, according to income tax brackets outlined in the Income Tax Act of 1962, and many may fall into the provisional taxpayer category.
“In terms of the new segments, such as the social influencers’ economy, Sars understands that traditional marketing campaigns are increasingly digitising through smart technologies.”
If people are being paid in kind, or in services or goods, they need to contemplate that they will also have to be able to accumulate cash to pay the tax.
— Mike Teuchert, Forvis Mazars’ national head of taxation services
“Sars is generally finding that most marketing budgets are contracting social personalities to lend their image to digital platforms. This is a shift away from established marketing houses towards individuals with a sizeable following,” the statement said.
The revenue service made it clear that any form of payment received by influencers was considered taxable.
“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.”
According to the tax authority, the social influencer segment is “not different” to other taxpayer segments in that income earned must be disclosed and taxed — “freelance work is similar”.
“Citizens working as social influencers are encouraged to declare income earned from brand collaboration, sponsored content, and affiliate marketing, whether they have been paid in cash, products, or services. These taxpayers, like all others, are making a significant contribution to the health of our country and its democracy.”
To ease compliance, Sars has developed outreach tools tailored for this new taxpayer segment, including products, videos, webinars and rulings designed to clarify obligations. It also emphasised that “full voluntary disclosure is critical” and that education will be the starting point of engagement.
Sars commissioner Edward Kieswetter said the organisation would take a supportive approach while insisting that influencers play their part.
“Sars is looking forward to working with this segment to provide clarity and certainty, but also to provide them with a seamless taxpayer experience,” he said.
“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.”
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.