Written by Moratwe Mashao, MaxProf Business Development Officer
As South Africa’s digital economy continues to expand, a growing number of individuals are earning income through platforms like YouTube, Twitch, TikTok, OnlyFans, and Instagram. These content creators, ranging from gamers and vloggers to lifestyle influencers and online educators, are increasingly becoming part of the formal economy. But with this growth comes a pressing question: should these digital entrepreneurs be paying Value-Added Tax (VAT)?
Understanding VAT in the South African Context
In South Africa, VAT is governed by the Value-Added Tax Act No. 89 of 1991. It is a consumption tax levied on the supply of goods and services, currently set at 15%. Although a VAT increase to 15.5% was proposed for May 2025, it was reversed by the Minister of Finance in April 2025.
According to Section 23(1) of the VAT Act, any person (individual or business) who carries on an enterprise and earns more than R1 million in taxable supplies over any consecutive 12-month period is compulsorily required to register for VAT. This includes influencers, streamers, and other online earners who operate independently and not as employees.
Who Qualifies as a VAT Vendor?
To determine VAT liability, SARS considers whether the individual is:
- Carrying on an enterprise (i.e., providing goods or services for payment),
- Earning more than R1 million in a 12-month period, and not making exclusively exempt supplies
- Operating independently (not under an employment contract).
If these conditions are met, the individual must register for VAT and charge VAT on their services. This applies regardless of whether the income is received in cash, products, or other forms of compensation.
What About Gamers and Streamers?
Gamers who earn income through Twitch subscriptions, YouTube ad revenue, sponsorships, or donations are also considered to be carrying on an enterprise. If their income exceeds the R1 million threshold, they too must register for VAT. The same applies to OnlyFans creators, podcasters, and digital educators.
Voluntary VAT Registration
Even if earnings are below the R1 million threshold, individuals may voluntarily register for VAT if they earn more than R50,000 in a 12-month period. This can be beneficial for those who want to claim input VAT on business expenses like equipment, internet costs, and marketing.
SARS Is Watching
SARS has become increasingly vigilant in tracking digital income. In 2025, SARS formally introduced a taxpayer segment for social influencers and gig workers, reinforcing its intent to ensure compliance in the digital economy. These individuals are treated as sole proprietors or independent contractors, and SARS assesses them on a case-by-case basis.
VAT on Foreign Digital Services
For foreign platforms providing services to South African consumers (e.g., YouTube Premium, Netflix), VAT obligations also apply. However, as of 1 April 2025, foreign suppliers are exempt from VAT if they supply services exclusively to VAT-registered businesses in South Africa. If even one customer is not VAT-registered, the exemption is lost.
Conclusion: A Shift Toward Formalisation
The rise of the digital economy has blurred the lines between hobby and profession. Whether you’re an influencer, gamer, or digital creator, if you’re earning significant income, SARS considers you a business and businesses pay VAT.
The bottom line? If you’re making money online in South Africa, it’s time to treat your digital hustle like a real business. That means registering for tax, keeping proper records, and if you cross the R1 million mark, charging and paying VAT.
