BIR probes 250 top-earning social media influencers for tax compliance: finance dept

ABS-CBN News

Posted at Sep 16 2021 10:48 AM

MANILA— At least 250 social media "influencers" are currently being investigated by the Bureau of Internal Revenue (BIR) to check if they have been paying taxes, the Department of Finance (DOF) said Thursday. 

The Bureau of Internal Revenue has issued Letters of Authority (LOAs) to investigate several "top earner" influencers, the DOF said in a statement. 
 
Social media influencers who earn money from their posts are classified as self-employed individuals engaged in the trade of business as sole proprietors, the DOF said citing a BIR report.

Earnings are "generally considered as business income" under BIR's Revenue Memorandum Circular No. 97-2021, it added. 

“We will do the investigation so that they would pay the necessary corresponding tax on their earnings,” BIR Deputy Commissioner Arnel Guballa said in his report to Finance Secretary Carlos Dominguez. 

The country's tax collection bureau earlier reminded social media influencers who allegedly make "huge" earnings from posts and vlogs to register and pay taxes. 

The BIR cited reports that some influencers "have not been paying their income taxes, despite earning huge income from the different social media platforms."

Based on the circular, social media influencers include those who earn their income from:

  • YouTube Partner Program
  • Sponsored social and blog posts
  • Display advertising
  • Becoming a brand representative/ambassador
  • Affiliate marketing
  • Co-creating product lines
  • Promoting own products
  • Photo and video sales
  • Digital courses, subscriptions, e-books
  • Podcasts and webinars

Those who receive free goods in exchange for promotions must declare as income the fair market value of the products, the circular stated.
 
Included in the computation of the gross income, which is also subject to tax, are royalties from other countries including payments under the YouTube Partner Program. 

Tax treaties allow the BIR to "obtain information from foreign tax authorities" under the Exchange of Information (EOI) provisions to determine tax liabilities, the DOF said.

Those who "willfully attempt" to evade tax payments or fail to make a tax return and supply the accurate and correct information will be held criminally liable under the tax code, it added.

Meanwhile, influencer group Creator and Influencer Council of the Philippines (CICP) said it is open to discussions with the government in terms of easing the burden of tax compliance.

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