BIR to probe 250 social media influencers

MANILA, Philippines — At least 250 social media influencers are up for investigation for nonpayment of taxes and other violations of the tax code, the Bureau of Internal Revenue (BIR) revealed yesterday.

In one of the first attempts of the BIR to go after digital-based income earners, Deputy Commissioner Arnel Guballa said the investigation would determine whether or not these social media influencers are complying with their tax obligations.

Initially, the probe has discovered that these personalities – known for publishing their original content on various digital platforms – are among the highest earners through revenues derived from Facebook, Instagram and YouTube.

“We encourage them to register, and then we have the profiling of over 250 personalities. We’ll do the investigation so that they would pay the necessary corresponding tax on their earnings,” Guballa said.

The BIR initiated a tax hunt measure against influencers through the issuance of a revenue memorandum circular (RMC) last August.

The RMC was released as part of the government’s efforts to gauge how large the digital economy has grown during the pandemic.

Under RMC 97-2021, the BIR ordered influencers with gross income of above P3 million to pay a value added tax (VAT) of 12 percent, while those below that amount must settle eight percent on the gross sales or receipts in excess of P250,000.

In exchange, they can avail themselves of deductions provided under the law provided that they file invoices for the items, allowing them to take out from business expenses like video equipment, computer and subscription fees the taxes due them.

However, the BIR warned influencers against trying to evade paying their tax dues or they may face a jail term of six to 10 years and a penalty of up to P10 million.

Guballa also told influencers that they need to include in their tax declarations whatever they earn from overseas sources. He said the BIR maintains the power to obtain information from foreign platforms about their income, and therefore can cross-check the data provided by direct sources from the one filed by an influencer.

In an interview in August, Finance Undersecretary Antonette Tionko said regulators will expand the tax base in digital platforms in line with business adjustments in the pandemic. Risks posed by physical contact have forced consumers and sellers alike to move their transactions online.

As such, Tionko said the government needs to grasp how the large the digital market has grown by demanding business owners based online to file their income returns and deliver on their tax obligations like usual payers.

Aside from influencers, the BIR is studying how it can put up a registry where it can compel non-resident foreign corporations, such as Sky Mavis – developer of popular play-to-earn game Axie Infinity – to pay their taxes.