BIR-7 stepping up crackdown on unregistered Airbnb units

CEBU, Philippines — The Bureau of Internal Revenue in Central Visayas (BIR-7) is stepping up efforts in detecting unregistered Airbnb or short-term property rentals, Regional Director Douglas A. Rufino said on Tuesday, October 9, 2024.

BIR has noticed the widespread use of condo units and other real properties converted into Airbnb units that are often unregistered and are not paying taxes.

The agency is currently coordinating with condo management to help in ensuring that the unit owners register with the BIR, warning that non-compliance could result in hefty fines.

Rufino noted that coordination from condo unit managers has been positive so far, although some unit owners claim that their renters are their relatives.

Current data in the region shows that the BIR's tax collection yielded a total of P36.1 billion surpassing the previous year's collection of P31.1 billion by over P5 billion.

Rufino said that the industry that contributes most of the collections in the region are coming from the real property industry and tourism related industries.

Airbnb is an online marketplace that connects people who want to rent out their property with people who are looking for accommodations, typically for short stays.

Rufino said that despite an increase in tourist arrivals, the declared hotel occupancy rates remain low, leading the tax agency to attribute much of this gap to tourists staying in unregistered Airbnb units.

The BIR estimated that for example in 100 Airbnbs only 40% of them are currently registered, with many operating under the radar in condominium units and beach areas. —/DGI (FREEMAN)