SA taxman cashes in on OnlyFans by imposing VAT
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Johannesburg - The SA Revenue Service has confirmed that all purchases and subscriptions on the OnlyFans content services website are subject to VAT, which accounts for 15% of all purchases in the country.
OnlyFans is a subscription content service that allows users to provide exclusive content to its subscribers or "fans" for a fee, usually in US dollars.
Although OnlyFans is predominantly infamous in South Africa as it is used mainly for adult entertainment, with content creators posting nude pictures and videos along with sex tapes, the website can also be used by musicians, models, fitness experts and influencers to make money by charging fans for exclusive content.
Across the world, some of the most famous people who are on OnlyFans include Cardi B, Michael B Jordan, Tyga, Bella Thorne, Amber Rose, Jordyn Wood, DJ Khaled and Fat Joe.
This means that for every transaction on the OnlyFans website, from the standard monthly profile subscriptions, to pay per view of the content and tips, South Africa’s taxman will be claiming a 15% VAT fee on every transaction. An $11.50 (about R175) transaction on the site, for example, will see the taxman take $1.50 (R23) fee.
Anton Fisher, a Sars spokesperson, confirmed businesses like OnlyFans - offshore entities that are supplying electronic services - are required to register for VAT in South Africa, in terms of the specific legislation in the VAT Act.
“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,” he said.
When asked how much Sars had raked in off OnlyFans and when it had started imposing VAT on the website, Fisher said Sars could not disclose the information due to taxpayer confidentiality.
The decision by the taxman to institute VAT on downloads from the OnlyFans website comes as the country is set to post a deficit on revenue collection for the 2020/21 financial year after a jobs bloodbath, poor economic conditions, a ban on the sale of cigarettes and three alcohol sales bans, due to the coronavirus lockdown.
Last year, when South Africa instituted a hard lockdown amid the pandemic coronavirus, the website gained infamy and popularity as young people used it to lure people to subscribe to its X-rated pages.
Some local OnlyFans content creators, like Trendy Bags founder Oddette Mashego (@OddeOmontle), said she had made more than R7 000 in a day on the website in July last year.
"Call me a w**** or whatever... but I made R7 800 yesterday alone from my OnlyFans account and I didn’t have to sleep with your dad so go f*** yourself," she tweeted at the time.
Another local high earner was Abby Zeus, who revealed in July that she was making about $2 000 (about R30 000) a week on OnlyFans. She said she was using the money from to sustain herself and support her mother.
Several other adult content creators, like Lindi Rasekoala (@Lindi_R), said that they had made about R70 000 on the content services website. Rasekoala spoke of others who had apparently made more than R1 million in just over two years.