The South African Revenue Service (SARS) is stepping up its tax compliance game by targeting social media influencers and content creators who fail to declare income from brand deals, sponsorships, and non-cash benefits.

The move comes as part of a larger effort to recover R513 billion in outstanding taxes and meet a revised revenue target of R1.84 trillion for the 2024/25 financial year.

According to reports, SARS is now deploying artificial intelligence (AI) and advanced data analytics to identify undeclared income, especially from individuals operating outside formal business structures.

AI-Powered Tax Enforcement

The use of technology marks a major escalation in SARS’s compliance strategy, as the authority focuses on non-traditional income streams often associated with digital entrepreneurship and influencer marketing.

“SARS will track income and brand partnerships using data-matching systems and AI to uncover non-compliance,” the report stated.

The agency is particularly concerned about sponsored posts, brand collaborations, and non-cash perks like free travel, meals, and promotional products that influencers receive in exchange for exposure.

These are considered part of gross income and must be reported in annual tax returns.

Informality and Risk

Industry professionals warn that many influencers started content creation as a side hustle or informal pursuit, and often lack knowledge of tax obligations, placing them at risk.

While receiving a free gift with no formal agreement may not attract tax, any arrangement involving a brand agreement to promote a product or service is taxable – even if no money changes hands.

Penalties and Legal Action

Failure to comply could result in steep penalties:

• Administrative fines ranging from R250 to R16 000 per month
• Potential criminal charges in cases of repeated or willful tax evasion

Tax experts are urging digital content creators to review their income sources, disclose all earnings, and seek professional advice where necessary.

“The belief that SARS won’t notice is misguided,” warned one tax consultant.

“Their systems are highly sophisticated and aligned with international data-sharing protocols.”

Broader Implications

This crackdown is part of a broader initiative to formalise and regulate the digital economy, ensuring all South Africans contribute their fair share.

It also signals that informal income streams are no longer invisible to authorities.