The SA Revenue Service recently confirmed that it has started imposing VAT on subscriptions or payments on the popular content app OnlyFans. This means all OnlyFans content creators will see 15% slashed off their income, even though they’re being paid in US dollars.
This is another example of how disconnected the South African government and its service providers are with the new digital economy. We saw a similar disconnection with the Department of Communications’ draft policy to force all South Africans with smartphones to pay for TV licences.
SARS knows something we don’t
OnlyFans is a subscription content service that allows users to provide exclusive (sometimes more risque) content to its subscribers for a fee. Its popularity has increased substantially following a massive drop in employment options thanks to strict lockdown regulations. Of course, the website can also be used by people in other professions, like musicians, models, fitness experts — all professions that have been severely impacted by lockdown.
But with SARS’ new VAT implementation on the platform, all payments from fans (including subscriptions, pay-per-view and tips) will be taxed. “An $11.50 (about R175) transaction on the site, for example, will see the taxman take $1.50 (R23) fee,” IOL details in a report.
“Firstly, Sars does not charge VAT on goods and services, rather, the VAT is charged in terms of the VAT Act that SARS administers… The VAT is imposed under the Act which requires businesses that carry on an enterprise in the Republic (of South Africa) to register for VAT and charge the VAT on sales made to its customers,” Anton Fisher, a SARS spokesperson said to IOL in an interview.
Fisher also didn’t want to confirm when the taxman started collecting tax from the service, or how much it has collected so far. Of course, this will have an adverse effect on other creators who plan to use the platform as a primary source of income.
Which isn’t such a bad idea if you look at what some outspoken South Africans have reportedly been cashing in from the app. A local OnlyFans accountholder, Abby Zeus detailed in a YouTube video that she comfortably makes around $2,000 a week (that’s over R120 grand a month). So that’s why SARS made this decision… Right.
