South African social media influencers are being warned to get their tax affairs in order, as the South African Revenue Service (SARS) looks into undeclared income earned through online content creation
Image: GCIS
South African social media influencers are being warned to get their tax affairs in order, as the South African Revenue Service (SARS) looks into undeclared income earned through online content creation and partnerships.
The revenue service is on a mission to collect around R513 billion in unpaid taxes, and earlier this year warned that it will be "unrelenting "in its efforts to meet the revised tax revenue target of R1,840.8 billion for the 2024/25 fiscal year set by Minister of Finance Enoch Godongwana.
The revenue service also confirmed earlier this year that it will be using artificial intelligence (AI) and data analytics to help achieve the revenue target.
In an interview with CapeTalk, Mohau Lebese, Managing Partner at Accountants on Point, warned that influencers must declare all forms of income.
"Most of these influencers basically don't have that information or education because they will be mainly like people who started from home doing funny videos and gained a lot of followers," Lebese said.
"But on the other hand, they don't have any tax knowledge, you know. So, yes, SARS needs you to declare this value in kind benefit".
Lebese added that these benefits could also include sponsorships, brand deals, free trips, meals, and other perks.
“So, they form part of your gross income and must be declared in your annual income. They form the definition of gross income,” he explained.
Lebese also explained the difference between informal freebies and formal sponsorship agreements.
"For example, if you receive a gadget to unbox and talk about on your platform without any formal contract, that’s one thing. But if you have agreed to promote a brand in exchange for that product or service, SARS treats that as income".
It was previously reported that failing to file a return, even when no tax is owed, can lead to administrative penalties of up to R250 to R16,000 per month for each return outstanding.
"In more severe cases, persistent non-compliance may result in criminal charges, including prosecution for tax evasion. Importantly, SARS uses advanced data-matching systems and international reporting standards to detect undeclared income, so assuming you're not "under the Radar" is a risky gamble," Tax Consulting South Africa said.