Unfazed by calls to go after big-time tax evaders before vloggers and online sellers, the Bureau of Internal Revenue (BIR) has asserted that the agency is really determined to collect taxes from prominent influencers.
During the SGV Tax Symposium on Friday, Aug. 19, BIR Commissioner Lilia C. Guillermo said big data holds immense possibilities for tax administration, thus the bureau would use these datasets to go after influencers, online sellers, online businesses.
“We will use big data analytics for processing of big data. There were complaints that we are not after those influencers, online sellers, and online businesses,” Guillermo said.
“We will use big data analysis from the social media data and identify big time online sellers and influencers,” she added.
Guillermo’s pronouncement comes after Senator Rafael Tulfo lashed out at the BIR, saying the agency must focus on the “big fish”, like big-time oil smugglers, and not on some small fry if it really wants to collect serious money through taxation.
Tulfo slammed BIR following complaints from a vlogger and an online seller that some BIR agents visited their homes and knocked on their doors to inquire about their tax payments.
In September 2022, the tax bureau said it was looking into an initial 250 top earning social media influencers to check if they have been paying their taxes.
Letters of Authority (LOAs) for the conduct of investigation were also issued to certain socmed 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, 2021.
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 YouTube, sponsored social and blog posts, display advertising, becoming a brand representative, affiliate marketing, among others.
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.