250 social media ‘influencers’ on BIR crosshairs

MANILA, Philippines—The crackdown on tax-delinquent “influencers” has started, as the Bureau of Internal Revenue (BIR) initiated an investigation of 250 of such social media celebrities who may have earned millions of pesos and raked in freebies through their vlogs and social media posts.

The BIR recently reported to Finance Secretary Carlos Dominguez III that it already issued letters of authority (LOAs) to the yet unnamed influencers who, based on initial BIR investigation, belonged to the “top earners,” the Department of Finance (DOF) said in a statement on Thursday (Sept. 16).

LOAs are an official BIR document which empowers revenue officers to examine and scrutinize taxpayers’ books in order to determine their correct tax liabilities.

The BIR’s Revenue Memorandum Circular (RMC) No. 97-2021 issued in August reminded these influencers that taxes are due for every peso they earned.

In a text message on Thursday, Internal Revenue Deputy Commissioner Arnel Guballa declined to provide the names of the 250 social media personalities. “We are collating their records,” Guballa said.

The DOF quoted Guballa as telling Dominguez that the BIR was still encouraging influencers to register as taxpayers and settle their dues.

On the 250 influencers currently being profiled by the BIR, Guballa said “we will do the investigation so that they would pay the necessary corresponding tax on their earnings.”

However, the BIR may face a hurdle in investigating some influencers who had already deactivated their social media accounts for various reasons right after the issuance of RMC 97-2021.

Guballa said these influencers’ digital footprint may still be traced by the BIR’s information systems group.

As more and more transactions take place in the digital space due to the “new normal” wrought by the prolonged COVID-19 pandemic, the government has turned its sights on uncaptured income tax sources generated through online channels.

In the case of influencers, the BIR said in RMC 97-2021 that it had received information that “certain social media influencers have not been paying their income taxes despite earning huge income from the different social media platforms.”

“There are also reports that they are not registered with the BIR or are registered under different tax types or lines of business but are also not declaring their earnings from social media platforms for tax purposes,” the country’s biggest tax-collection agency had said.

In the circular, the BIR had defined influencers as “all taxpayers, individuals or corporations, receiving income, in cash or in kind, from any social media sites and platforms (YouTube, Facebook, Instagram, Twitter, TikTok, Reddit, Snapchat, etc.) in exchange for services performed as bloggers, video bloggers or ‘vloggers’ or as an influencer, in general, and from any other activities performed on such social media sites and platforms.”

The BIR had explained that influencers’ earnings were being considered as business income of self-employed individuals or sole proprietors.

Being such, they must pay income tax, plus business taxes like percentage or the 12-percent value-added tax (VAT).

Even foreigners needed to shell out taxes for their social media earnings here, even as the BIR had said influencers can qualify for deductions and protection against double taxation, as in the case of foreigners.

A group of social media influencers belonging to the group Creator and Influencer Council of the Philippines (CICP) already sought a dialogue with the BIR in August, while urging the agency to make it easier for them to settle their tax dues.

The BIR had warned of bigger fines and longer jail time awaiting those who profit from their vlogs and viral content on social media but do not pay taxes.

TSB