The South African Revenue Service has significantly stepped up its tax compliance initiatives, turning its focus towards social media influencers who may have failed to declare earnings from sponsored content and brand collaborations. This move comes as part of SARS’s larger strategy to retrieve R513 billion in outstanding taxes and meet its revised collection target of R1.84 trillion for the 2024/2025 financial year.
The tax authority has embraced emerging technologies, deploying artificial intelligence systems and advanced data analytics to identify individuals who generate income through online platforms but fall short in fulfilling their tax obligations. The approach marks a technological and strategic shift aimed at sectors operating outside traditional business models.
SARS is ‘intensifying efforts to recover billions in unpaid taxes,’
with digital content creators firmly in its sights. The informal nature of influencer marketing—often driven by freelance arrangements and brand collaborations—has made it fertile ground for under-declared or overlooked income.
For many influencers, content creation began as a hobby, often without full awareness of the tax responsibilities that would eventually accompany financial or non-cash rewards. As one expert put it,
“often lack tax knowledge,”
particularly when navigating the nuances between casual product gifting and structured partnerships.
This lack of awareness becomes problematic when influencers receive compensation that is not necessarily monetary. According to SARS, benefits such as complimentary travel, luxury items, dining experiences or electronics form part of an influencer’s gross income and are therefore subject to tax.
The difference between a casual gift and a commercial exchange is critical. When an individual receives an item without obligation, it may not warrant tax reporting. However,
“any exchange where influencers agree to promote a brand in return for goods or services is treated as taxable income.”
This clarification places a substantial amount of influencer activity under the umbrella of taxable transactions.
To close the gap between informal digital earnings and tax compliance, SARS is leveraging artificial intelligence not only to track income but to match data across platforms. This includes monitoring public social media activity, digital footprints, and financial movements to assess discrepancies between lifestyle and declared income.
“SARS has access to sophisticated data-matching systems and international reporting standards”
warned tax analysts, highlighting that the days of flying under the radar are quickly coming to an end for online personalities. These technologies enable SARS to cross-reference financial data across jurisdictions, aligning with global standards to identify irregularities.
The consequences for non-compliance are far from trivial. Administrative penalties can range from R250 to as high as R16 000 per month, depending on how many tax returns remain outstanding and for how long. Influencers who continue to disregard their tax duties risk not only hefty fines but the potential for criminal prosecution for tax evasion.
Experts suggest the best course of action for content creators is to treat their work as a formal business venture, complete with record-keeping, financial planning, and compliance strategies. As influencer marketing becomes a more mature and lucrative industry in South Africa, regulatory oversight is bound to intensify.
