THE Bureau of Internal Revenue (BIR) reminded social-media influencers to pay their income tax and business tax as it warned that they may be held criminally liable for failure to comply with their obligations.
In its Revenue Memorandum Circular 97-2021 released on Monday, the BIR said it has been receiving reports that certain social-media influencers have not been paying their income taxes despite earning huge income from different platforms.
Apart from this, the BIR cited reports that they are not registered with the BIR or are registered under different tax types or line of business but are also not declaring their earnings from social-media platforms for tax purposes.
“This Circular is therefore issued to clarify the tax obligations of all social-media influencers, individual or corporation, with the end goal of raising revenues from their undeclared income and at the same time, reminding them of their obligations under the law and of the possible consequences of their failure to pay taxes,” read the circular signed by BIR Commissioner Caesar R. Dulay.
Unless exempted in line with the provisions of the National Internal Revenue Code, the BIR said social- media influencers shall be liable to pay income tax and business tax, which may either be percentage tax or value-added tax.
The bureau also warned that social-media influencers who fail to file returns and pay taxes may be criminally liable apart from paying the taxes due, as well as the corresponding penalties. It also warned against under-declaration of taxable sales, receipts, or income, or a substantial overstatement of deductions.
“It must be emphasized that the BIR also has the power to obtain information from foreign tax authorities pursuant to the Exchange of Information [EOI] provision of the relevant tax treaties.
The BIR has the means to verify their income as it is clothed with a special power to obtain information from its treaty partners. The BIR may safely rely on the data provided by its treaty partners to establish the influencer’s tax liability,” it said.
“The social-media influencers are, therefore, advised to voluntarily 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%] of the tax or of the deficiency tax,” it added.
For this year, BIR is targeting to collect a total of P2.081 trillion.
It has so far collected P1.206 trillion as of end-July this year, based on the latest preliminary BIR data obtained by the
BusinessMirror.
It fell short of its P1.226-trillion collection goal for the seven-month period as Covid-19-induced lockdown restrictions continue to hamper economic activity.