BIR To Tax 250 Socmed Influencers
The Bureau of Internal Revenue (BIR) is set to investigate an initial list of 250 social media (socmed) “influencers” to check if they have been paying their taxes.
Photo Insert (for representation purposes only): Alodia Gosiengfiao, who began her career as a cosplayer, is a pioneer Filipino Influencer and to this day remains a household name among netizens. Given that the BIR has not released the names of the socmed influencers tagged, it is unknown whether or not she is on the list of 250.
In a report to Finance Secretary Carlos Dominguez III, the BIR said that Letters of Authority (LOAs) for the conduct of investigation were already issued to certain social media influencers found to be “top earners” in their field.
According to the BIR, socmed influencers who earn money from their posts on digital media are classified as self-employed individuals or persons engaged in trade or business as sole proprietors.
Their earnings are generally considered as business income, as defined under BIR’s Revenue Memorandum Circular (RMC) No. 97-2021 issued last Aug. 16.
“We encourage them to register, and then we have the profiling of over 250 personalities. 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 Dominguez during a recent Department of Finance (DOF) executive committee (Execom) meeting.
Under RMC 97-2021 issued last month, socmed influencers should pay income tax and percentage tax or, if applicable, the value-added tax (VAT), as mandated under the National Internal Revenue Code (NIRC) and other existing laws.
Based on the Circular, socmed influencers are defined as those who derive their income from the following sources: a) YouTube Partner Program; b) sponsored social and blog posts; c) display advertising; d) becoming a brand representative/ambassador; e) affiliate marketing; f) co-creating product lines; g) promoting own products; h) photo and video sales; i) digital courses, subscriptions, e-books; and j) podcasts and webinars.
The Circular states, among others, that socmed influencers who receive free goods in exchange for promotions must declare as income the fair market value of these products.
Income treated as royalties from another country, including payments under the YouTube Partner Program, shall likewise be included in the computation of the gross income of the socmed influencer and shall be subject to tax.