SARS targeting influencers who punt fake luxury products

The lure of high-end fashion products tricks many consumers into buying fakes unknowingly, but even knowingly just to be able to flash the logo or look of a luxury brand despite it being a rip-off.

These items have become even more visible and sought after through the ease of the platforms provided by social media.

And the South African Revenue Service (SARS) is widening its net to stop fake beauty and fashion products before they go viral, which has big consequences for influencers, write Spoor & Fisher's Amani Patel and Marco van der Merwe in an opinion piece for News24.

RELATED: Tshwane metro police seize counterfeit goods worth R7 million

The writers highlight the term luxury duplicates or dupes which represent "products that mimic well-known luxury brands" and are often promoted on TikTok, Instagram and other social platforms, but at a fraction of the price.

Trade mark practitioner Jarred West, partner at Spoor & Fisher, points out that SARS has wide-ranging powers and when influencers, as with any other person professional or otherwise who generate an income, the taxman has a right to a portion of that income as a form of income tax.

Many infuencers may believe that the income they generate as a result of these paid-for or sponsored advertisements doesn't have to be declared and is not a normal form of income so they're not liable to pay taxes, but this is not the case.

In some instances, they might even be required to register for VAT.

"So SARS is definitely going to start looking at specific red flags, especially when influencers don't necessarily get paid by cash but rather through tips or hospitality events or products. Those must also be declared as a form of income."

There is a fine line between goods that are counterfeit and 'dupes' that aren't necessarily counterfeit. It's really the difference between where a trademark or a copyrighted artistic work has been duplicated exactly and where there is an infringement of that trademark, he explains: "A good example is something like a Gucci or a Louis Vuitton handbag - If it says LV but it wasn't manufactured by LV, that is a counterfeit bag."

He uses perfume as another example, where the product doesn't carry the brand name but says it's inspired by X or Y.

"In as much as there's no trademark infringement, and therefore it can't actually be a counterfeit, some brands just cross the line too much to be a pretty counterfeit as opposed to just being a dupe. What constitutes a dupe is still very much under consideration by our authorities and our courts, although pure counterfeiting is a criminal offence and the Counterfeit Goods Act deals with that specifically."

Scroll up to the audio player to hear more from West, and click here to read the comprehensive article