BIR says tax registration, filing for influencers voluntary for now; mandatory filing in the works

PHILSTAR

THE BUREAU of Internal Revenue (BIR) said tax registration for social media influencers is currently voluntary, though it is studying how to compel the industry to disclose its income more regularly.

The BIR will come up with process to “crack down” on influencers in order to make them pay tax on their income, Deputy Commissioner for Operations Arnel SD. Guballa said in a text message Tuesday.

The process for voluntary registration and payment was outlined in Revenue Memorandum Circular (RMC) No. 97-2021 issued late Monday.

The circular cited reports that “certain social media influencers have not been paying their income taxes despite earning huge income from the different social media platforms.”

It said some influencers are not registered with the bureau, or are registered as engaged in another line of business while failing to declare income from social media platforms.

“This circular is therefore issued to clarify the tax obligations of all social media influencers, individual or corporations, with the end goal of raising revenues from their undeclared income and at the same time, reminding them of their obligations under the law and of the possible consequences of their failure to pay taxes,” according to the circular.

The BIR classifies social media influencers as individuals or companies generating income, both in cash or in kind, from social media platforms like Youtube, Facebook, Instagram, Tiktok, Reddit and Snapchat.

They are entitled to the option of paying income tax or business tax, either in the form of percentage tax or value-added tax.

Income declarations are mandatory from sources like Youtube’s partner program; sponsored social and blog posts; display advertising; serving as a brand representative or ambassador; affiliate marketing; co-creating products; the promotion of their own products; photo and video sales; digital courses, subscriptions and electronic books; and earnings from podcasts and webinars.

The agency has no estimate as yet on the social media influencer population and the potential revenue to be collected from them, according to Mr. Guballa.

The BIR is currently studying the segment’s revenue potential, and registrations will help improve such projections, according to Undersecretary Antonette C. Tionko, head of the revenue operations group of the Finance Department.

“BIR recently issued an RMC on influencers requiring them to register and pay their taxes. That’s one of the measures we are adopting because I don’t know if they pay tax… They can (register) online,” Ms. Tionko told reporters Tuesday.

The BIR also reminded online businesses to register with the bureau and pay their taxes when it issued RMC 60-2020 in June 2020.

“It seems that the recent RMC issued by the BIR involving social media influencers is trending online and has generated mixed reactions — some bashing the BIR but mostly positive feedback from netizens,” Maria Lourdes P. Lim, the tax managing partner of Isla Lipana & Co., the PwC Philippine member firm, said in a mobile phone message Tuesday.

Ms. Lim said the circular serves as a reference for online influencers on their tax compliance obligations, since it provides details on the earnings that have to be declared and which ones are subject to tax.

“I don’t think the social media influencers are being singled out, there are also other industries which the BIR is looking at,” she said.

“If there are concerns about social media influencers who have not yet registered with the BIR, it would be advisable that they do so as soon as possible and pay their fair share of the taxes to avoid adverse implications if they are subsequently audited by the BIR. They can also consider seeking professional help for assistance,” she added. — Beatrice M. Laforga

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