A LAWMAKER has scored the Bureau of Internal Revenue (BIR) for relying only on the voluntary tax declarations of social media influencers, questioning whether the agency failed to properly enforce the tax laws.
“Those paid content creators, are you monitoring if they are paying taxes to our government?” ACT Teachers party-list Rep. France Castro asked BIR officials during the TriCom congressional hearing on fake news online.
Lawyer Yves Gonzalez, a representative of YouTube, clarified that the platform does not monitor whether Filipino content creators pay taxes.
“On the part of YouTube, we do not. And we believe the local internal revenue service are the ones who are monitoring that,” Gonzalez said.
BIR officials admitted however, that they rely only on self-reporting by the influencers, as their earnings primarily come from foreign clients.
“As stated by our colleague, we rely only on the voluntary declaration of the influencers in so far as their income (is concerned) because there will be great difficulty in monitoring the same considering that their income primarily comes from foreign income payors,” said BIR’s lawyer Tobias Gavin Arcilla.
Castro was visibly dissatisfied, questioning why the BIR merely wait for influencers to voluntarily declare their income instead of proactively obtaining data from social media platforms.
“Are we not doing our job well, or are we remiss? Why do you say voluntary?” she asked.
“The platform is there, Google Philippines or YouTube. You can ask from them the list of those who generate income. So why do we wait for voluntary tax declarations from the content creators?” Castro said in Filipino.
Arcilla defended the BIR’s actions, saying that the agency is limited by current laws on tax investigations.
“Just to clarify, under existing tax laws, we cannot just investigate any taxpayer. As per existing tax laws, audits are done randomly or based on those who are classified as high risk. That is why we cannot just audit any taxpayer,” he explained.
But Castro argued that this indicates loopholes in the tax system, which Congress may need to address.
“In aid of legislation, we have to review what our BIR resource person says, that they have no mandate to randomly investigate taxpayers,”Castro added.
Antipolo City Rep. Romeo Acop questioned the legal basis for the BIR’s handling the influencers’ tax payments.
“What exactly is the law governing this?” Acop asked.
Arcilla responded that the BIR follows the Tax Code and its implementing rules and regulations.
Acop then asked if the BIR is aware of the Revenue Memorandum Circular No. 97-2021 which specifically governs the taxation of social media influencers.
Arcilla asserted that the BIR has been implementing this memorandum since its issuance in 2021.
Nonetheless, Acop demanded concrete results from the agency.
Acop also directed the BIR to submit a report on how many social media influencers have actually been taxed since the issuance of the circular.
Arcilla assured the committee that the BIR will comply with the request.