New tax regulations for South African influencers and gig workers

South African social influencers and gig economy participants are now firmly in Sars’ crosshairs, following the revenue authority’s announcement of a new taxpayer segment aimed at tightening compliance in the digital space.

This development signals a clear shift in Sars’ strategy: all income, whether received in cash, products, travel, or other perks, must be declared and taxed.

Earlier this month, Sars issued a media release outlining its zero-tolerance stance on undeclared income from influencers and gig workers. The announcement also guided how these earners should meet their tax obligations. As digital marketing and online entrepreneurship continue to evolve, Sars is determined to ensure that these emerging income streams are not excluded from the tax net.

According to Jashwin Baijoo, associate director and head of strategic engagement and compliance at Tax Consulting SA, this new segment, titled “Social Influencers and the Gig Economy,” builds on the success of Sars’ High-Wealth Individual Unit and Crypto-Asset Revenue Augmentation Unit.

With R36.5 billion in taxes written off last year, Sars is under pressure to recover lost revenue. While increasing VAT or adjusting income tax brackets remains politically sensitive, the revenue authority is now turning to alternative taxpayer groups to fill the gap, he says.

Social influencers often earn through brand collaborations, affiliate marketing, sponsored content, and other non-traditional arrangements. Sars has made it clear that all forms of compensation, monetary or otherwise, must be declared.

According to the newly released 2024 South African Influencer Benchmark Report, local influencers can charge anything between R3,000 and R18,000 for a single Instagram post and up to R8,000 for a reel. 

Luncedo Mtwentwe, managing director at Vantage Advisory, says globally, social media advertisement spends spike by as much as 30% during the festive period, a trend echoed here in South Africa, meaning that local influencers are likely to earn significantly more during this time. However, with significant earning potential comes an even greater tax responsibility.  he says many influencers overlook the need to operate as businesses, a misstep that can result in serious compliance challenges.

Baijoo says: “Sars’ latest segmentation model is not just a warning, it’s a call to action. Social influencers and gig workers must understand that their income, regardless of form, is subject to tax. Voluntary disclosure is not optional; it’s essential".

To support taxpayers in these segments, Baijoo says Sars is rolling out targeted resources such as educational materials, explainer videos, and workshops.

"Sars commissioner Edward Kieswetter emphasised the agency's desire to collaborate with influencers, ensuring they have clarity regarding their obligations and a positive taxpayer experience. It is essential for influencers to recognise that their non-traditional income sources do not exempt them from tax regulations," he says.

Where voluntary compliance fails, Sars’ other strategic objective, making non-compliance hard and costly, comes into play. Using data-driven insights, Sars can detect discrepancies and trigger audits that span up to five years. Offending taxpayers may face understatement penalties of up to 200%, a steep price for failing to declare income, says Baijoo.

"Taxpayers who have been active in the influencer space or gig economy and have not declared their income are strongly encouraged to engage with specialist tax attorneys. Such professionals can aid taxpayers with Voluntary Disclosures, assessing their tax liability based on historical transactions, and assist in regularising the treatment of income, before Sars initiates any audit proceedings. All this, while maintaining legal professional privilege (where engaging with a tax attorney) and mitigating the exposure to risk," he says.

To succeed like a brand, Mtwentwe says influencers need to act like a brand. Transparency and compliance aren’t just good ethics; they’re good business. For influencers who find themselves falling short of compliance, the Sars Voluntary Disclosure Programme (VDP) that was launched in 2012 offers a valuable second chance to get back on track. The VDP enables taxpayers to declare previously undeclared income and avoid severe penalties, provided they act proactively and approach Sars before an audit is initiated.

Mtwentwe cautions that while the VDP serves as a critical lifeline for influencers who have overlooked their tax obligations, it’s not a one-size-fits-all solution. “To benefit from the VDP, you must act before Sars identifies non-compliance, and it is important to note that leniency isn’t guaranteed after that point. To avoid this risk altogether, compliance must evolve into a lifelong habit. Tax laws are constantly changing, and staying compliant is an ongoing responsibility,” he explains.

According to Baijoo, this recommendation is based on numerous cases where taxpayers have received audit notices and letters of final demand due to Sars’ improved data analytics and system modernisation. The revenue authority’s message is clear: comply, or be made to comply. A common misconception is that income from foreign sources or platforms is invisible to Sars. In reality, international information-sharing agreements and advanced data tools mean that such transactions are well within Sars’ reach.

Baijoo says for influencers and gig workers, the following steps are recommended: keep accurate records and provide full disclosure of all income streams, including those received in kind; set aside a portion of earnings for tax, similar to contractors; utilise Sars’ educational resources to understand your obligations; and if you’ve already mis-stepped, consult a tax professional immediately to rectify historic non-compliance.

Sars’ expansion into the influencer and gig economy space underscores the importance of adhering to tax regulations in an increasingly digital world. The best defence is a good offence, stay compliant, stay informed, and seek expert advice when needed. Where influencers or artists find themselves needing to disclose previously undeclared interests or foreign income, the best practice is to seek professional assistance and follow a sound compliance strategy, according to Baijoo.

"Should you already find yourself on the wrong side of Sars, there is a first mover advantage in seeking the appropriate legal counsel, ensuring the necessary steps are taken, under legal professional privilege, and providing a degree of protection so you do not lose your loyal followers. In instances of potential conviction on commission of a tax offence, Sars must be engaged legally, and we generally find them utmost agreeable where a correct tax and compliance strategy is followed," Baijoo says.

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