To better monitor online transactions and social media posts for tax compliance, the Bureau of Internal Revenue (BIR) has ordered the creation of a special task force in each of its 19 regional offices that will focus on these newly designated sources of government revenue.
BIR Commissioner Caesar Dulay on Friday directed all district offices, as well as large taxpayer divisions and auditors, to monitor and verify the compliance of online merchants, social media influencers and other businesses operating through digital or online platforms that are registered or residing within their jurisdictions.
“Business transactions nowadays are executed and facilitated using internet platforms, such as Facebook, Instagram, YouTube, Airbnb, Lazada, Shopee, etc. Regardless of the manner of doing their business or of earning income, they have the obligation to register, file their tax returns and pay whatever taxes are due to the government,” Dulay said, adding:
“The conduct of business through a digital platform does not exempt anyone from his/her/its tax obligations under the law.” Create database
Revenue officers are also expected to create a database of all online sellers of goods and services as well as social media influencers and the properties being leased out by online lessors.
They should determine who have remained unregistered with the BIR, and evaluate the compliance of those who are already listed based on documents, such as official receipts and sales invoices, books of accounts, on the timeliness of their tax filings and payments.
The bureau will issue letters of authority—an official document that empowers revenue officers to examine and scrutinize taxpayers’ books to determine their correct tax liabilities—and file tax evasion cases on top of other tax enforcement actions against delinquent taxpayers.
Earlier, Finance Secretary Carlos Dominguez III, who oversees the BIR, asked Dulay to establish a dedicated unit to track online businesses’ sales. The BIR was also told to learn from foreign tax collectors how digital transactions were being taxed efficiently in their countries.
According to the Department of Finance (DOF), 2,282 online-based retailers and service providers have already registered with the BIR as of October.
Self-employed
Last year, the bureau reminded online sellers, many of whom had flourished as the pandemic shuttered most commercial establisments and restricted travel, to register as taxpayers. It invoked a 2013 regulation issued by then BIR chief Kim Jacinto-Henares.
The BIR is also running after delinquent social media influencers and has investigated an initial batch of about 250 who may already be earning millions of pesos through their blogs or videos but have yet to pay the corresponding income tax.
According to the BIR’s Revenue Memorandum Circular No. 97-2021, influencers are classified for tax purposes as self-employed individuals or persons engaged in trade or business as sole proprietors.
As of September, 105 social media personalities and content creators have registered with the BIR, data from the DOF showed.
There is a pending measure in Congress pushing for a 12-percent value-added tax on video and music streaming, online shopping sites and advertisements on social media.