The Department of Finance is eyeing an undetermined amount of tax to be generated from so-called “social media influencers” who are making money through online content, Finance Undersecretary Antonette Tionko said Tuesday.
The Bureau of Internal Revenue defines social media influencers as those generating income for services as bloggers and video bloggers on social media sites such as YouTube, Facebook, Instagram, Twitter, TikTok, Reddit, and Snapchat.
In an online briefing, Tionko backed the BIR’s move of issuing a memorandum that reminded social media influencers of their tax obligations.
“That is one of the measures we are adopting because that is the sector that I don’t know if they pay tax. We can check now when we ask them to register with the BIR. They can do it online. We are trying to make it easy for the local online sellers and people with transactions online by making registrations online also,” Tionko said.
When asked how much taxes could be captured from the social media influencers, Tiokno said the BIR is still studying it.
“We will know once they register. The other way to do it is to look at their counterparties, to audit their counterparties, like the ones that advertise and all that. You can see the match, that is the way to do it. Hopefully when they register, we will get the number,” Tionko said.
On Monday, the BIR issued a memorandum reminding social media influencers of their tax obligations.
Social media influencers are also liable for income tax and percentage or value-added tax.
The BIR also said social media influencers are classified for tax purposes as self-employed persons engaged in trade or business as sole proprietors.
Apart from income tax, BIR said online content creators are also liable for business tax.
BIR said self-employed individuals whose gross sales or gross receipts and other non-operating income do not exceed the VAT threshold of P3,000,000 shall have the option to avail of the 8% tax on gross sales or gross receipts and other non-operating income.
Meanwhile, social media influencers are allowed to deduct all ordinary and necessary expenses paid during the taxable year. These include development, management, operation and conduct of the trade, business or exercise of profession.
For example, YouTubers may deduct from their gross income expenses for film, computer equipment, subscription and software licensing fees, internet and communication expenses, and office supplies, among others.
Those who do not pay taxes will be liable for attempting to evade or defeat tax, which imposes a fine of P500,000 to P10 million and detention of not less than six years but not more than 10 years.