BIR probes Lyka for alleged unpaid taxes

The Bureau of Internal Revenue main office in Quezon City. (File photo from Philippine Daily Inquirer)

MANILA, Philippines — The Bureau of Internal Revenue (BIR) is investigating social media platform Lyka for its alleged unpaid taxes.

Internal Revenue Deputy Commissioner Arnel Guballa told the Inquirer Friday that while Lyka was registered with the BIR’s revenue district office (RDO) 39 in Quezon City, it was “not paying taxes.”

“I instructed the investigation,” Guballa said, adding that Lyka’s supposed deficiency taxes were still being determined by the BIR.

Also, the BIR “will evaluate” the other tax dues that Lyka owed, Guballa said, since it served as a payment system operator despite being unregistered to do so.

Photo from Lyka Gems Philippines Facebook page

Last week, Guballa told the Inquirer that the BIR will check on Lyka after the Bangko Sentral ng Pilipinas (BSP) ordered the platform to stop operations.

Lyka users buy goods and services through the platform using so-called gift cards in electronic mode or GEMs.

Its users’ engagements were being rewarded with these GEMs accumulated through a digital point system, which “can be shared among friends, exchanged for goods with our partner-stores, and can be collected to redeem gifts on our Lyka Mall ranging from gift certificates, gadgets, and even hotel accommodations,” it said.

Some celebrities and social media influencers had been reportedly purchasing big-ticket items, including expensive vehicles, using Lyka GEMs.

Since last year, the BIR has been cracking down on unregistered online business activities and their unpaid tax dues.

Also pending in Congress are measures to collect the 12-percent value-added tax (VAT) from digital services and transactions still currently uncaptured by the Tax Code.