A Kiwi influencer says Inland Revenue's move to tax gifted items may impact small businesses who use content creators for exposure.
In a draft statement published this week, the IRD gave further guidance over what going to be taxed for social media content creators.
The statement suggests gamers, streamers, bloggers, influencers and artists could be liable to pay tax on any free products they've received from brands.
"So the rule is if it can be on-sold it's going to be taxed even if you don't on-sell it, so that's a huge range of products," says finance strategist Hannah McQueen.
Influencers will be responsible for assessing the resale value of items they receive and paying tax on that amount. The issue arises of having to pay out cash when they haven't received any payment.
McQueen says influencers will "find themselves caught" when previously they wouldn't have.
Speaking to The Project, wellness expert, author and influencer Rachel Grunwell says there are "pros and cons" to the change.
"I do really feel for little businesses that this could really impact on," she says.
"I support a lot of little business by doing free posts because I want to help them flourish."
Having to pay tax on gifts may discourage influencers from posting about the products, or they may refuse to receive gifts altogether.
Companies will now have to pay influencers to post their products to social media so income can then be taxed, instead of the current loophole where gifted items often get the spotlight at no cost.
Grunwell says a positive to this will be a reduction in waste.
"Companies are going to be sending out less product, which will be a good thing because, at the moment, they send it out en masse and perhaps influencers don't want to receive it so they'll throw it out."
She says successful Kiwi influencers are receiving "tens of thousands of dollars" worth of gifts every year and encourages them to declare these freebies.
"If it's worth quite a lot of money and you are putting it on your social media you will have to declare that and declare it to the taxman in the future."
