Social media influencers savvy: pay taxes

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The Bureau of Internal Revenue (BIR) has reminded social media influencers to pay their income tax and business tax, as it warned they could be held criminally liable if they fail to meet their obligations.

In its Revenue Memorandum 97-2021 issued on Monday, the BIR said it had received reports that some social media influencers failed to pay their income taxes despite earning huge income from different platforms.

Apart from this, BIR cited reports that they are not registered with BIR or are registered under different tax types or industries, but also do not report their income from social media platforms. for tax purposes.

“This circular is therefore issued to clarify the tax obligations of all social media influencers, individuals or companies, with the ultimate aim of earning income from their undeclared income and at the same time reminding them of their obligations under the law. and the possible consequences of their non-payment of taxes,” reads the circular signed by BIR Commissioner Caesar R. Dulay.

Unless exempted under the provisions of the National Tax Code, BIR said social media influencers will be liable for income tax and business tax, which can be either a percentage tax or a tax on added value.

The bureau also warned that social media influencers who fail to file returns and pay taxes may be criminally liable in addition to paying taxes owed, along with corresponding penalties. He also cautioned against underreporting taxable sales, receipts or income, or substantially overstating deductions.

“It should 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 relevant tax treaties.

The BIR has the means to verify their income as it has special power to obtain information from its treaty partners. BIR can safely rely on the data provided by its treaty partners to establish influencer tax liability,” he said.

“Social media influencers are therefore advised to voluntarily and truthfully declare their income and pay their corresponding taxes without waiting for a formal investigation by the BIR to avoid being subject to tax evasion and civil penalty. fifty percent. [50%] tax or deficiency tax,” he added.

For this year, the BIR aims to collect a total of 2,081 billion pesos.

It has so far collected 1,206 billion pula at the end of July this year, based on the latest preliminary BIR data obtained by the
Business Mirror.

It fell short of its fundraising target of 1.226 billion pesos for the seven-month period as Covid-19-induced lockdown restrictions continue to hamper economic activity.

Picture credits: Sarayuth Punnasuriyaporn/Dreamstime.com

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