SARS has intensified scrutiny on influencers, digital creators and side hustlers, spotlighting their tax obligations.

'It's an uncomfortable wake-up call for those pocketing up to R5 000 a month for the odd product post or jetting off on brand deals worth millions. But handled correctly, it could become a defining moment that legitimises and empowers the gig, influencer and side hustle economy,' observes Luncedo Mtwentwe, Vantage Advisory MD. 

Mtwentwe, writing on News24, argues that SA's side hustle economy, including influencers, is a critical economic lifeline.

'In SA, they are a lifeline for our economy, which remains highly concentrated,' he adds, referencing the Competition Commission’s 2021 Concentration Report, which notes large companies dominate most sectors, leaving small businesses and entrepreneurs with limited market share.

With formal economy opportunities scarce, South Africans have embraced gig work, e-hailing, online stores and influencer marketing, which saw an estimated R500m in marketing spend in 2024.

The informal economy, valued at over R700bn, supports millions.

However, Mtwentwe observes that tax compliance in this sector is fraught with challenges.

'Too often, this sector remains invisible in the eyes of the state. Compliance is complicated, rules are poorly explained and ordinary citizens struggle to understand what’s required of them,' Mtwentwe writes. 

Many micro-influencers earn below the R95 750 tax threshold but must still declare income, while some top-tier creators earn R40m-R60m annually without declaring.

He argues that this creates grey areas where undeclared income thrives.

SARS, equipped with AI and corporate disclosures, is now tracking these earnings, treating free products, paid posts and sponsored trips as taxable benefits.

'From free meals and fashion hauls to all-expenses-paid travel, what may feel like gifts are in fact taxable benefits,' Mtwentwe warns.

However, he argues that the core issue is education, not just compliance.

'Many digital creators are first-generation entrepreneurs. They didn’t study tax law, and some haven’t even finished school let alone gone to university,' Mtwentwe writes on News24.

Expecting them to navigate complex tax systems like large corporations is unrealistic. Yet, compliance offers opportunities.

Registering as a provisional taxpayer or business unlocks benefits like expense deductions, enhancing credibility with banks, investors and clients.

'Once you are part of the formal system, you gain credibility with banks, investors and clients. You unlock access to financing, scale opportunities and long-term sustainability,' Mtwentwe argues.

SA urgently needs investment in financial and compliance literacy. 'Influencers, gig workers and small entrepreneurs need this not only to survive but to thrive,' Mtwentwe adds.

Initiatives by SARS, the SA Institute of Chartered Accountants and the Companies & Intellectual Property Commission (CIPC) aim to simplify compliance but more is needed. Registering with SARS, CIPC and labour institutions like the UIF should feel empowering, not punitive.

‘We cannot afford to ignore the multibillion-rand side hustle economy, but neither can we let it slip under the tax radar any longer … corporate giants may still dominate the waters with their fancy yachts, but the side hustle economy is where the fleets are being built. We need to fuel their engines, not sink them in red tape – and it starts with making them part of the economy,’ argues Mtwentwe.

Full analysis on BusinessLIVE site