The tax man is coming for your second income and that includes your side hustles like Airbnb hosting. Picture: Nappy.co
If you are a taxpayer in South Africa and have a second income stream then it is vital that you disclose this information to the South African Revenue Service (Sars).
This warning comes from Tax Consulting SA, which said that failing to do so can lead to significant consequences, including criminal prosecution.
The tax institute noted that under section 234 of the Tax Administration Act, 28 of 2011, you could find yourself behind bars for anything from submission of a false statement to issuing an erroneous or incomplete document to Sars.
“As a South African resident taxpayer, all income earned, whether primary or secondary and regardless of source, must be disclosed to Sars,” the company said.
“This transparency ensures that taxpayers meet their legal obligations and contribute fairly to the country's revenue collections. When taxpayers fail to disclose secondary income, they not only breach legal requirements but also risk severe penalties and criminal prosecution.”
Tax Consulting SA said that a new focus has been placed on secondary income by Sars in order to meet South Africa's commitment to the Financial Action Task Force (FATF) standards.
Moreover, South Africa is looking to enhance its Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) regime.
“This includes escalating investigations and prosecutions of serious and complex money laundering cases,” the firm said.
The consulting firm said that taxpayers who have historically not disclosed all their income should make use of the Voluntary Disclosure Programme (VDP).
Tax Consulting SA explained that the VDP allowed taxpayers to rectify their tax affairs before Sars can initiate action.
“The VDP is available only to taxpayers where Sars is unaware of the tax default. It provides an opportunity to regularise tax affairs with reduced penalties and without the risk of criminal prosecution, as long as the disclosure is made before Sars begins an investigation,” the firm added.
In 2023, Airbnb said that around 1,800 South Africans used their site to offer out rooms and homes as a way to derive an income.
The portal has become a boon for South Africans looking to make a second income.
According to Airbnb, tax is a complex topic. The company noted that each person’s tax obligations will vary based on their particular circumstances.
The company said that users need to research their tax obligations and consult a tax professional.
“In general, the money you earn as a host on Airbnb is considered taxable income that may be subject to different taxes like income tax, business rates, corporation tax or Valued Added Tax (VAT),” Airbnb explained.
The company warned SA hosts to check with Sars to find out if they need to declare the amount they earn from hosting.
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