‘Tax tech giants before milking influencers’

Influencers, content creators and even legislators have urged the South African Revenue Service (Sars) to pursue due taxes on multibillion-dollar tech giants before considering a tax on social media influencers and content creators.

A parliamentary roundtable on podcasters was held this week and Sars recently made remarks about the need to develop a system to tax highly paid social media influencers. These have focused attention on proposals to tax content creators.

Telecommunications operators generated R159.3bn in revenue in 2024 from customers using their services to access social media platforms, according to the Independent Communications Authority of South Africa (Icasa).

Responding to questions in the National Assembly this week, communications & digital technologies minister Solly Malatsi said South Africa was preoccupied with finding a balanced approach to regulating over-the-top (OTT) media platforms, as they offered “very seductive” measures that influencers use to distribute their content.

South Africa hasn’t finalised the best approach to maximise the two things that are coming to the fore at all times, which is the best taxation dispensation that will enable more investments in the country that will help uplift more local productions coming to the fore and secondly that we continue to ensure that we remain the destination for these OTTs to expand their investment.”

—  Solly Malatsi, communications & digital technologies minister

“South Africa hasn’t finalised the best approach to maximise the two things that are coming to the fore at all times, which is the best taxation dispensation that will enable more investments in the country that will help uplift more local productions coming to the fore, and secondly that we continue to ensure that we remain the destination for these OTTs to expand their investment,” he said.

Asked about the need to regulate podcasters to curb misinformation and disinformation, Malatsi said the Film and Publication Board (FPB) needed to be strengthened through increased budgetary allocations to boost enforcement of safeguards against misinformation.

“To be frank, in acknowledgement of the prevalence of the issue that we are dealing with, the FPB’s interventions, inasmuch as they are impactful, are coming short because the reality is that we are seeing an increase in the spread of disinformation and misinformation.”

The chair of the portfolio committee on communications and digital technologies, Khusela Sangoni Diko, said the committee appreciated that content creators in South Africa are in a thriving business that deserves a modernised legislative system and government support.

“It necessarily means that, as part of that, we need to look at how we professionalise the sector to protect it. The discussion is not so much about the content itself but the platforms and the responsibility that they have.

“We understand the thinking that Sars holds in that regard because they are being recognised as businesses, but we want to have a much broader conversation … We need to understand the monetisation side of it … and how they impact how podcasters are influenced and so forth.”

Before South Africa speaks about taxes or licensing systems, industry stakeholders have an opportunity to provide input and insights, she said. The committee looks forward to engaging with Sars and other government departments on the matter.

Meanwhile, Malatsi in 2025 released the draft white paper on audio and audiovisual media services and online safety for final written comment. It seeks “to create a safe, inclusive and competitive digital media ecosystem that reflects South Africa’s cultural diversity and democratic values, while remaining aligned with international best practices”.

Sars commissioner Edward Kieswetter told the Sunday Times in the week of the 2026 budget speech that the methodologies and modalities of getting tax revenue from thriving social media influencers are a puzzle that various countries have been working on, including those in the Organisation for Economic Co-operation and Development (OECD).

“We are, in a way, in uncharted territory, but also in many cases, we are struggling alongside. We work together with our OECD peers so we can accelerate our load … If you think of the digital marketing sector, their business models are changing from billboards and TV adverts to social media.

“If you assume that the digital marketing, the ad marketing size of the business is ... let’s say it’s R30bn, then at least half of that has shifted to social media. So that’s the first one. But they are formalised, they are already registered, so it’s not as if none of that is captured.

“Then if you add to that individuals, not formal digital marketing agencies, who have entered that space — this would be influencers that are on TikTok, on YouTube, who get a following, and then monetise this following … We are saying, look, all forms of income, regardless of how you make it, must be taxed. If you’re earning, from whatever activities, higher than the threshold, you are subject to paying tax.”

Kieswetter said Sars is updating the nexus that determines a taxing right, from a company’s physical presence to its market presence. If a company is present in a market, it owes a tax to that market, regardless of whether it has an office there.

“Some of the big policy issues are how tax policy keeps up with the digitalisation of economies. In the good old days, [there was] the principle that determined a taxing right. Now, taxing rights are sovereign rights. Taxing rights are deeply sovereign. But the way that taxing rights were determined was by physical presence.

Any consideration of new taxation measures should take into account the structure of the creator economy in South Africa. A very small percentage of creators generate significant commercial income, while the vast majority are either early-stage or earn minimal revenue

—  Jonathan Warncke, South African Podcasters Guild MD

“But that was in the day when a factory was a physical place, [or] a shop was a physical place. Now with the proliferation of e-commerce, of digital services, if you’re buying a book from Kindle, it’s not a physical book … Netflix [and] Google Services … are services that are provided within a jurisdiction but manufactured in another, where the head office is.”

William Bird, director of Media Monitoring Africa, said in the UK, Amazon reportedly paid a single pound in tax relative to its massive market capitalisation of more than $2-trillion, adding that tech companies that serve as platforms for influencers and content creators draw large revenue without paying proportionate tax.

“In an ideal world, which this isn’t, you would say if you earn your income as an influencer, then you should pay tax on that … But it’s not an ideal world, and I think that … to track that is incredibly hard. So to do that you are going to need a number of steps. But I think that preceding that, what we need from the companies is to get a sense of how much tax they’re really paying.”

Jonathan Warncke, MD of the South African Podcasters Guild (SAPG), said the guild’s understanding is that existing tax legislation already applies to income earned by content creators, including revenue from brand partnerships, advertising, and sponsorships.

“From that perspective, creators who generate meaningful income should already be contributing within the current framework. The majority of podcasters and content creators in South Africa, however, earn little to no income from their work or treat it as a secondary income stream.”

Any new policy would need to carefully distinguish between full-time commercial creators and hobbyists or early-stage creators.

“Any consideration of new taxation measures should take into account the structure of the creator economy in South Africa. A very small percentage of creators generate significant commercial income, while the vast majority are either early-stage or earn minimal revenue.”

Existing tax frameworks already provide mechanisms for taxing income from brand deals, advertising and sponsorships. Clarity, enforcement and education may be more effective than introducing entirely new categories of taxation, he added.

Business Times