Socmed content creators, influencers group welcomes BIR circular on tax payment; to craft code of ethics

A group of social media content creators and influencers has welcomed the Bureau of Internal Revenue’s (BIR) issuance of a memorandum circular reminding their ranks of their tax obligations.

“We, the Creator and Influencer Council of the Philippines (CICP), welcome Revenue Memorandum Circular 97-2021 which was recently issued by the BIR,” the group said in a statement.

“We would like to commend the BIR in issuing the said circular as it gives a general overview of all the tax rules and regulations that are applicable to the members of our organization,” it said.

The BIR memorandum issued on August 16, reminded social media influencers of their tax obligations and the possible consequences for not paying them. 

"There are also 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 from social media platforms for tax purposes," the memorandum read.

"Whatever may be the reasons, it is now the most opportune time to discuss the tax obligations of these social media influencers," the BIR added.

The taxman 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.

The BIR classified social media influencers, for tax purposes, as self-employed persons engaged in trade or business as sole proprietors.

Thus, they are liable for income tax and percentage or value added tax.

The CICP said the BIR memorandum provides information as to how our members could benefit from certain tax treaties between the Philippines and its partner countries.

“Ultimately, this information will help our members in avoiding double taxation,” the group said.

Code of ethics

The group said it is now crafting a code of ethics “centered around content standards, fair dealing, transparency, social responsibility and compliance with law.”

“The circular is a timely reminder of the values that we champion for our members and the broader influencer community,” CICP said.

“For this, we are thankful for the BIR in giving this opportunity not only for us to promote the organization’s core values, but also for us to show that we are doing our part as responsible citizens of this country,” it said.

The BIR cited Section 23 of the National Internal Revenue Code of 1997, which indicates that "citizens of the Philippines residing therein and domestic corporations shall be taxable on all income derived from sources within and without the Philippines."

With this, CICP said among the organization’s core values is responsible citizenship, “which necessarily includes the payment of taxes because it is the lifeblood of our government and allows it to provide necessary services especially in these uncertain times.”

“As such it is imperative among us, as citizens, to do our part by paying proper taxes. We view the circular as an opportunity to exemplify the importance we give to paying taxes, and show others that we view it as a patriotic duty that any responsible citizen should fulfill,” the group said.

CICP called on the BIR to introduce certain mechanisms that will ease the burden of tax compliance by using the digital platforms, “not only for the benefit of the Influencers, but also for the benefit of all taxpayers.”

“We would be happy to dialogue with the Bureau about these initiatives,” it said.

“We hope the BIR recognizes that we in the organization, as well as the vast community of Influencers, conduct business digitally,” it added.

Apart from income tax, BIR said online content creators are also liable for business tax.

"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," said BIR.

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.

Failure to pay taxes may also be a violation of Section 255 of NIRC, which imposes at least P10,000 fine and imprisonment of not less than one year but not more than 10 years.

Aside from this, the BIR also advised its offices to conduct "full-blown tax investigation" against social media influencers residing within their respective jurisdictions.—AOL, GMA News