As can be seen, the Philippine government is struggling to meet the cost of coronavirus programs. And so, the Bureau of Internal Revenue (BIR) is finding ways to raise tax revenues despite the current economic situation. In recent years, revenues generated from online activities have shown drastic growth during the pandemic. This is why the BIR is checking on 250 high-earning social media “influencers”  for tax compliance.

BIR said that influencers who “willfully attempt to evade the payment of tax or willfully fail to make a tax return, to supply accurate and correct information or to pay tax” will be held criminally liable in addition to the payment of taxes and corresponding penalties. 

According to the Department of Finance, BIR sent letters of authority (LOA) to 250 social media personalities in the country. This will allow the bureau to conduct a probe on these influencers who are considered as “top earners” in their field.

“We encourage them to register, and then we have the profiling of over 250 personalities,” BIR Deputy Commissioner Arnel Guballa said. 

“We will do the investigation so that they would pay the necessary corresponding tax on their earnings,” Guballa further added.

In a BIR circular issued last month, BIR defined social media 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.”

These people are required to pay income tax and percentage tax or, if applicable, the value-added tax (VAT) as stated in the same circular.

BIR reminded the public that it has tax treaties with other countries and that they have the power to obtain information from tax authorities abroad.  “The social media influencers are, therefore, advised to voluntary and truthfully declare their income and pay their corresponding taxes without waiting for a formal investigation to be conducted by the BIR to avoid being liable for tax evasion and for the civil penalty of fifty percent (50 percent) of the tax or of the deficiency tax,” the circular read in part.

BIR also reminded influencers who receive free products in exchange for social media shout-outs and posts that they should declare as income the “fair market value” of the goods they received. Even online sellers are duly reminded to pay sales and income taxes.