More than half of the initial list of tax-delinquent social media influencers have yet to begin the sign-up process with the Bureau of the Internal Revenue (BIR) despite crackdown, the Department of Finance (DOF) said.
Finance Assistant Secretary Dakila Elteen M. Napao said late Friday, Oct. 8, that only 105 individuals who are raking in profits through social media channels have registered with the tax bureau as of Sept. 15, 2021. That number is not even half of the initial 250 top earning social media celebrities, or content creators, who have caught the BIR’s attention.
“I’m sure that they are looking into those currently registered first and probably will be expanding their search to those who still haven’t registered,” Napao told reporters when asked about the BIR number.
The tax bureau is scrutinizing the social media platform economy, Napao said, noting that those who continue to ignore their obligations will be looked into and examined by the BIR.
“There is the tool in the tax code, whereby the BIR can get information from the third party [to help it track additional sources of income],” the DOF official said.
He added that the BIR is not leaving any stone unturned.
Napao said social media influencers who deleted their accounts and personalities who are based-abroad but are earning in the Philippines through online platforms will be examined by the bureau.
“The regulation also provides for mechanism or an exchange of information, involving those media influencers earning income even outside of the country. So there is also that mechanism that can be availed of by the BIR under the tax treaties,” Napao said.
BIR Deputy Commissioner Arnel Guballa earlier reported to the DOF 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, social media 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.
Under RMC 97-2021, social media 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.