SARS to Introduce Influencer Tax

The South African Revenue Service (SARS) has touted introducing stricter control on earnings by influencers and Content Creators. This has long been in contention with earnings from companies such as YouTube, TikTok, Meta and even X, which have monetisation of content on their channels. This tax will not be new as it falls under the basic income tax laws, which tiers that ensure higher earners pay more tax. This will also be into the aligning factors such as lower earners not being taxed.

Influencers come in many forms, from those taking side gigs while working full time jobs, this will be added unto their basic income tax bracket. Their earnings will be required to be reported to SARS in the necessary reporting period. This move by the revenue collector is to ensure the countries money is properly collected.

What It Means For Content Creators

This move by SARS will have influencers or content creators shifting from personal earnings to setting up businesses (propriety limited) to offset the taxable tiers. This can be done by having their companies as agencies which represents them. It is good to note though that the cost of company compliance can be high and taxing on time as well as resources. Running a company in South Africa has become increasingly hard however the benefits of paying less in tax is always better. The standard business tax is 27% (twenty seven) while personal tax can go up to 45% (forty five).

Here are the current tax brackets

In South Africa, you are required to pay income tax if you earn more than R95 750 and you are younger than 65 years.

• 1 – 237 100 18% of taxable income
• 237 101 – 370 500 42 678 + 26% of taxable income above 237 100
• 370 501 – 512 800 77 362 + 31% of taxable income above 370 500
• 512 801 – 673 000 121 475 + 36% of taxable income above 512 800
• 673 001 – 857 900 179 147 + 39% of taxable income above 673 000
• 857 901 – 1 817 000 251 258 + 41% of taxable income above 857 900
• 1 817 001 and above 644 489 + 45% of taxable income above 1 817 000

Understanding tax regulations is important for content creators as earnings have been largely unregulated and while spending all your money made from brands is good. Owing the revenue service is extremely bad as the accrued interests and failure to pay may lead to jail time. Some brands have a holding tax of 25% (twenty five) to ensure creators do not carry the tax burden.

Company Compliance

Here are the current compliance red tapes and likely costs you have to navigate annually with running a business:

• Business account charges
• CIPC annual returns
• Beneficial Ownership filing
• SARS annual filing for tax clearance
• Bookkeeping