tax – Page 3 – Author Carlo Carrasco

Withholding tax on online sellers could address revenue leakages

January 18, 2024January 12, 2024carlocarrasco

With the 1% withholding tax on online sellers already in effect, there is potential that the said tax could address revenue leakages, according to a BusinessWorld news article.

To put things in perspective, posted below is an excerpt from the BusinessWorld news article. Some parts in boldface…

THE GOVERNMENT should ensure that it will be able to properly implement and monitor the collection of withholding tax on online sellers.

The Bureau of Internal Revenue (BIR) recently issued Revenue Regulations (RR) No. 16, which imposes a withholding tax on the gross remittances made by electronic marketplace operators and digital financial service providers to merchants.

Analysts said that the implementation of the withholding tax on online sellers will allow the BIR to better track transactions in the digital economy.

“The implementation of a 1% withholding tax on online sellers is intended to expand the tax base by addressing potential revenue leakages in the growing online retail industry,” China Banking Corp. Chief Economist Domini S. Velasquez said in a Viber message.

“Ideally, the withholding tax system should streamline the tax payment process for online sellers and should have no substantial impact on prices under the assumption that retailers are paying correct taxes,” she added.

Eleanor L. Roque, tax principal of P&A Grant Thornton, said that the measure provides the BIR an additional mechanism to “ensure that taxes are paid by the business owners since their income will also be reported by their withholding agents.”

Ms. Velasquez noted that the imposition of the withholding tax may also mitigate some instances of noncompliance by online sellers.

“This measure is expected to increase government revenues and promote transparency among companies engaged in online retail trade,” she added.

Ms. Roque said that the tax will be an “additional administrative burden” on electronic marketplaces.

“These entities will have to put controls in place to identify remittances to online sellers that are subject to withholding taxes,” she said in a Viber message.

Under BIR regulation, a withholding tax of 1% will be imposed on one-half of the gross remittances by e-marketplace operators and digital financial service providers to the sellers or merchants for the goods and services paid or sold through their platforms or facilities.

However, the tax is not imposed if the annual total gross remittances to an online seller for the past taxable year has not exceeded P500,000; if the cumulative gross remittances to an online seller in a taxable year has not yet exceeded P500,000 or if the seller is duly exempt from or subject to a lower income tax rate pursuant to any existing law or treaty.

The regulation covers marketplaces for online shopping, food delivery platforms, platforms to book lodging accommodations, and other similar online service or product marketplaces.

Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think the withholding tax on online sellers will solve government revenue leakages?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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Thank you for reading. If you find this article engaging, please click the like button below, share this article to others and also please consider making a donation to support my publishing. If you are looking for a copywriter to create content for your special project or business, check out my services and my portfolio. Feel free to contact me with a private message. Also please feel free to visit my Facebook page Author Carlo Carrasco and follow me on Twitter at @HavenorFantasy as well as on Tumblr at https://carlocarrasco.tumblr.com/ and on Instagram athttps://www.instagram.com/authorcarlocarrasco

Ease of Paying Taxes Act signed into law by President Marcos

January 11, 2024January 7, 2024carlocarrasco

In recent times, Philippine President Ferdinand “Bongbong” Marcos, Jr., signed into law the Ease of Paying Taxes Act (officially referred to as Republic Act Number 11976 or RA11976), according to a news article by the Philippine News Agency (PNA).

To put things in perspective, posted below is an excerpt from the PNA news article. Some parts in boldface…

President Ferdinand R. Marcos Jr. signed into law Republic Act (RA) 11976 or the Ease of Paying Taxes Act which aims to modernize and increase the efficiency and effectiveness of tax administration and strengthen taxpayer rights.

In a statement on Sunday, the Presidential Communications Office (PCO) said the Ease of Paying Taxes Act is one of the priority legislations mentioned during the State of the Nation Address in 2022 and 2023.

“The law allows the government to capture as many taxpayers as possible into the tax net by streamlining the system and minimizing the burden on taxpayers, increasing the country’s revenue collection in the long run,” the PCO said.

The new law, signed on Friday, introduces administrative tax reforms and amendments to several sections of the National Internal Revenue Code of 1997.

It also updates the Philippine taxation system, adopts best practices and replaces antiquated procedures.

Among RA 11976’s salient features are classification of taxpayers into micro, small, medium, and large; electronic or manual filing of returns and payment taxes either to the Bureau of Internal Revenue (BIR), through any authorized agent bank or authorized tax software provider; option to pay internal revenue taxes removal to the City or Municipal Treasurer; elimination of the distinction between documentation and basis of sales of goods and services; and classification of value-added tax (VAT) refund claims into low, medium and high-risk.

The law ensures the availability of registration facilities to non-Philippine resident taxpayers; promoting and assisting taxpayers in tax processes; streamlining; reducing documentary requirements; and digitalizing BIR services through the development of the Ease of Paying Taxes and Digitalization Roadmap.

The law likewise imposes 180 days to act on claims for refund of erroneous or illegal tax collection and increases the amount for the mandatory issuance of receipts for each sale and transfer of goods and services from PHP100 to PHP500.

According to PCO, the law mandates the BIR to adopt an integrated digitalization strategy by providing end-to-end solutions for the benefit of taxpayers.

These include adopting integrated and automated system for facilitating basic tax services, setting up electronic and online system for data and information exchange between offices and departments, streamlining of procedures by adopting automation and digitalization of BIR services, and building up BIR’s technology capabilities.

RA 11976’s implementing rules and regulations shall be promulgated 90 days from the effectivity of the Act after the consultation of the Finance Secretary with the BIR and the private sector.

Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think this new law will positively impact the nation’s taxation system? Do you think the new law’s impact will be felt within the next two years?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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BIR imposes 1% withholding tax on online merchants with annual earnings of over P500,000

January 3, 2024December 30, 2023carlocarrasco

Those who engage with selling online here in the Philippines and earn over P500,000 annually will have a new normal to live with as the Bureau of Internal Revenue (BIR) officially imposed the 1% withholding tax on online merchants that are found qualified, according to a Philippine News Agency (PNA) news article. Take note that BIR had been targeting online sellers previously and the Department of Finance (DOF) asserted that online sellers should be subject to the same tax obligations as traditional brick-and-mortar business owners for the sake of fairness.

In the year 2022, the digital economy of the Philippines contributed P2.08 trillion, equivalent to 9.4% of gross domestic product. Of this, e-commerce had the highest growth at 26.5%, with its share to the economy reaching 20% or P416.12 billion.

To put things in perspective, posted below is an excerpt from the PNA news article. Some parts in boldface…

The Bureau of Internal Revenue (BIR) has announced that online merchants with earnings amounting to more than PHP500,000 annually are now subject to a 1-percent withholding tax.

BIR Revenue Regulation 16-2023, issued last December 21, said the withholding tax will apply to one-half of the gross remittances by electronic marketplace operators and digital financial services providers to the sellers or merchants for the goods or services sold through their platform.

The BIR defines an electronic marketplace as a “digital service platform whose business is to connect online buyers/consumers with online sellers/merchants, facilitate and conclude the sales, process the payment of the products, goods or services through such digital platform, or facilitate the shipment of goods or provide logistic services and post-purchase support within such platforms.”

These include marketplaces for online shopping, food delivery platform, and platform for accommodation booking.

The BIR clarified, however, that the withholding tax will not be imposed if the annual total gross remittances to an online seller do not exceed PHP500,000.

The withholding tax shall not apply “if the cumulative gross remittances to an online seller/merchant in a taxable year has not yet exceeded PHP500,000,” the BIR said.

Sellers subject to a lower income tax rate pursuant to any existing law are also excluded.

Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think the BIR made the right move? Do you think the imposition of the 1% withholding tax on online sellers (that made over P500,000 annually) will have a significant impact on e-commerce here in the Philippines? If you were planning to sell goods or services online, does the 1% withholding tax discourage you?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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Thank you for reading. If you find this article engaging, please click the like button below, share this article to others and also please consider making a donation to support my publishing. If you are looking for a copywriter to create content for your special project or business, check out my services and my portfolio. Feel free to contact me with a private message. Also please feel free to visit my Facebook page Author Carlo Carrasco and follow me on Twitter at @HavenorFantasy as well as on Tumblr at https://carlocarrasco.tumblr.com/and on Instagram athttps://www.instagram.com/authorcarlocarrasco

BIR admits taxing social media influencers is difficult

November 7, 2023November 3, 2023carlocarrasco

As far as the Bureau of Internal Revenue (BIR) is concerned, implementing taxes on social media influencers and collecting from them are still hard to do, according to a Philippine Star news report.

To put things in perspective, posted below is an excerpt from the Philippine Star news report. Some parts in boldface…

The Bureau of Internal Revenue (BIR) continues to have difficulty in making social media influencers comply with the country’s tax laws even amid a widening adoption of various social media platforms as a form of income.

BIR Assistant Commissioner Jethro Sabariaga said the country’s largest revenue collecting agency remains in dialogue with social media influencers for them to pay their tax obligations to the government.

The BIR decided to seek a dialogue with the influencers in March this year. Sabariaga admitted that it is difficult for the BIR to get revenues from the digital space.

“Yes, (it is difficult). We will not mince with words. It might take some time, but that’s what we’ve been doing,” Sabariaga said.

“We are trying to win their side in the engagement process. The more that you can ask them to do voluntary compliance, the better rather than to fight with them,” he said.

BIR defines social media influencers as people whose digital posts are being monetized, classifying them as self-employed individuals or persons engaged in trade or business as sole proprietors.

The BIR earlier said it was looking into some 250 top earning social media influencers to see if they have been paying their obligations.

Based on BIR’s circular, influencers are required to pay income tax and percentage tax or value-added tax, if applicable, as mandated by the Tax Code.

According to the BIR, influencers derive their income from YouTube, sponsored social and blog posts, display advertising and affiliate marketing, among others.

Let me end this piece by asking you readers: What is your reaction to this recent development? Do you agree with the BIR’s plan to tax social media influencers? Is your favorite vlogger or YouTuber based in the Philippines who might have made some revenue online based on his or her output?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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National economic managers expect government collections to exceed 2023 revenue target

November 7, 2023November 4, 2023carlocarrasco

Even though it looks like that economic growth for the Philippines this year will end up short of 7%, the economic managers of the Marcos administration expect revenue collections to exceed the target for 2023, according to a GMA Network news report.

To put things in perspective, posted below is an excerpt from the GMA Network news report. Some parts in boldface…

The economic managers of the Marcos administration are expecting the government revenue collections this year to exceed target amid measures to improve tax administration and collection efficiency.

In a statement following a special coordination committee meeting on Friday, the Development Budget Coordination Committee (DBCC) said the “emerging total revenue collection for 2023 is estimated to be P3.84 trillion to P3.90 trillion.”

The projected revenue collection for the entire year is above the P3.73-trillion target set earlier by the DBCC.

In April, the economic managers set the revenue goal at P3.73 trillion this year, P4.184 trillion in 2024, P4.692 trillion in 2025, P5.255 trillion in 2026, P5.895 trillion in 2027, and P6.621 trillion in 2028.

The DBCC, chaired by the Budget chief, is composed of the secretaries of National Economic and Development Authority (NEDA), Finance (DOF), as well as the governor of the Bangko Sentral ng Pilipinas (BSP).

The DBCC, likewise, is expecting tax revenues to clock in at P3.50 trillion to P3.55 trillion, surpassing the target by about 15%.

The above-target revenue project resulted from the higher actual collections in the first nine months of 2023, which reached P2.84 trillion, up 6.8% year-on-year and exceeding the target for the period by 3%.

This, as both tax and non-tax revenues registered positive growth at 6.4% and 10.5%, respectively, “owing to the higher collections from the Bureau of Customs (BOC) and non-tax revenues of P152.57 billion.”

The DBCC said the Bureau of Internal Revenue (BIR) and the BOC are implementing several reforms to strengthen tax administration and enhance revenue collection, which include digitalization programs intended to eliminate corruption, increase transparency, and improve the ease of paying taxes.

Tax reform measures – Moreover, the economic managers said they will work closely with Congress for the passage of the previous administration’s remaining tax reforms on passive income and financial intermediaries taxation and real property valuation and assessment, as well as new tax measures.

“These include the excise tax on single-use plastics (SUPs), rationalization of the mining fiscal regime, motor-vehicle road users’ tax, excise tax on sweetened beverages and junk foods, tax on pre-mixed alcohol, value-added tax (VAT) on digital service providers, carbon taxation, capital market development bill, and the military and uniformed personnel (MUP) pension reform bill,” the DBCC said.

Meanwhile, the national government’s disbursement accelerated significantly from 93.4% of the program as of June 2023 to 98.9% as of September.

“This was mainly driven by the robust disbursement in the third quarter, reaching P3.82 trillion as of the end of September,” the economic managers said.

Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think that government collections will exceed the 2023 revenue target?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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Imposition of withholding tax on online sellers could happen before December 2023

November 2, 2023October 31, 2023carlocarrasco

Those of you who have been engaging with online selling, you better brace yourselves as the Bureau of Internal Revenue (BIR) hopes to begin imposing a creditable withholding tax before December 2023, according to a BusinessWorld news report. Specifically, this move applies on partner-merchants of online platforms.

To put things in perspective, posted below is an excerpt from the BusinessWorld news article. Some parts in boldface…

THE BUREAU of Internal Revenue (BIR) is hoping to start imposing a creditable withholding tax on partner-merchants of online platforms before the start of December, an official said.

“The process could be shorter, and we might just come up with it before the start of December. It will not be unreasonable to expect it before the start of December,” BIR Assistant Commissioner Jethro M. Sabariaga told reporters on the sidelines of the SGV Tax Symposium last week.

“The longer you withhold this release, you’re hobbling a significant portion of today’s economic transactions,” he added.

The BIR last week released the final draft of the amendments to Revenue Regulation No. 2-98 which currently does not cover income payments by online platform providers.

Under the final draft, the BIR would impose a withholding tax of 1% on one half of the gross remittances by domestic e-marketplace operators to the online merchants for the goods or services sold through their facility.

However, the withholding tax will not apply if annual total gross remittances to an online merchant for the past taxable year has not exceeded P250,000, or if the cumulative gross remittances to an online merchant in a taxable year has not yet exceeded P250,000.

Also exempted are online merchants who are part of a cooperative duly registered with the BIR with a valid Certificate of Tax Exemption.

Mr. Sabariaga said the BIR took note of the suggestions and objections to the draft rules raised by affected sectors. The BIR’s deadline for comments from stakeholders on the final draft ended on Oct. 27.

“This will all be taken into consideration and then be studied and then the final draft will be released and exposed,” he said.

Since then, Mr. Sabariaga said the agency consulted with various industries to come up with the latest version of the draft.

“It’s the first exposition of the draft, you have to consider the various industries, the applicability of the withholding (tax) on the various industries, the rates, the economic provisions of it,” he added

The BIR has been seeking ways to tax the digital economy, particularly as e-commerce surged during the pandemic.

In 2022, the digital economy contributed P2.08 trillion, equivalent to 9.4% of gross domestic product. Of this, e-commerce had the highest growth at 26.5%, with its share to the economy reaching 20% or P416.12 billion.

Let me end this piece by asking you readers: What is your reaction to this recent development? If you have been regularly selling online, do you think you will be covered by the planned withholding tax by the BIR? Do you have all financial and legal records prepared?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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BIR targeting online sellers

March 20, 2023March 13, 2023carlocarrasco

If you have been engaging on selling items or services online, you should be aware that the Philippines’ authority on taxation the Bureau of Internal Revenue (BIR) is constantly watching you and it is seeking ways to tax you, according to a BusinessWorld news report. Already the BIR has been communicating with the e-commerce platforms.

To put things in perspective, posted below is an excerpt from the BusinessWorld news article. Some parts in boldface…

THE BUREAU of Internal Revenue (BIR) is looking to collect taxes from online sellers on e-commerce platforms more efficiently.

BIR Commissioner Romeo D. Lumagui said it is difficult to monitor taxes on individual online sellers on e-commerce platforms.

“We’re in constant communication with the platforms, because it’s a challenge to monitor. We’re thinking of ways to approach it because if we look at individual online sellers, it’s a bit difficult. It’s a challenge,” he told reporters on Thursday evening.

Mr. Lumagui said the BIR is prioritizing ways to better collect taxes from online sellers and other new platforms this year.

The pandemic forced many entrepreneurs to shift to online selling using e-commerce platforms like Shopee and Lazada, as well as social media platforms such as Facebook, Instagram and Tiktok.

As of 2022, the Department of Trade and Industry (DTI) estimated there are around two million entities doing business as online sellers.

In 2021, the digital economy contributed 9.6% to the country’s gross domestic product (GDP), or about P1.87 trillion. DigiPinas, the multi-sectoral initiative led by UBX Philippines Corp., earlier said the Philippine digital economy can grow to as much as $150 billion or about P8.3 trillion in the next decade.

Meanwhile, Mr. Lumagui said the BIR will tap social media influencers to help educate the public on the importance of paying taxes.

“They have reach and I think that one way of making people comply with tax obligations is to educate the people since tax is a very complicated topic not easy to understand,” he said, adding the BIR will schedule a dialogue with them.

Mr. Lumagui said the BIR will continue its efforts to collect taxes from social media influencers, since they’re earning income. He noted there are already some who are undergoing tax audits.

“What we want is to dialogue with them that these are your obligations as social media influencers, you’re earning from whatever you’re doing, so this is your responsibility as income earners,” he said.

The BIR said it collected around P44.6 billion worth of tax from online content creators and retail sales at the end of 2021.

Let me end this piece by asking you readers: What is your reaction to this recent development? If you have been selling products or services online for the last twelve months, do you think the BIR’s move with taxing your business will negatively affect Philippine e-commerce as a whole? Have you set aside enough money for potential taxation by the BIR? What is the one thing about online selling that made you stay away from selling through physical establishments like a store?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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BIR says half a trillion Pesos lost to tax evasion each year

February 27, 2023February 21, 2023carlocarrasco

Tax evasion remains a very serious problem in the Philippines. As far as the Bureau of Internal Revenue (BIR) is concerned, the authorities lose around half a trillion Pesos each year due to tax evasion, according to a BusinessWorld news report.

To put things in perspective, posted below is the excerpt from the BusinessWorld news article. Some parts in boldface…

THE GOVERNMENT loses around P500 billion annually to tax evasion, according to a top Bureau of Internal Revenue (BIR) official.

“There is a lot, especially if we include those involved in illicit trade. In cigarettes alone, there’s around P100 billion,” BIR Commissioner Romeo D. Lumagui, Jr. said, when asked about revenue losses from tax evasion.

“Leakages aren’t part of that yet, like petroleum or vape products that aren’t registered, as well as fake receipts. I think it won’t go below P500 billion if you add everything up,” he added.

Mr. Lumagui said the BIR will have an easier time achieving its collection targets if it addresses tax evasion.

Earlier this month, the BIR filed 74 tax evasion complaints worth P3.5 billion against several companies.

“We will tailor efforts to improve digital services so businesses will leave the shadow economy and join the tax net. We will now focus on enforcement activities against tax evaders, put emphasis on tapping uncollected taxes through illegal activities,” Mr. Lumagui said.

The BIR is currently monitoring and investigating a number of suspected tax evaders.

“The most important right now is the selling of fake receipts and we know who (they are). We are investigating so we can file a case against those involved,” Mr. Lumagui said.

The BIR is targeting to collect P2.6 trillion in revenues this year.

“With all our activities and efforts we are making, we will be able to achieve the tax collection target,” he said.

In 2022, the agency collected a total of P2.34 trillion, surpassing its P2.1-trillion target.

Meanwhile, Mr. Lumagui said the agency will also review its policies after the Supreme Court declared void its regulations that require firms to disclose the personal information of investors.

“We must respect the privacy (of these investors) but when it comes to the correct amount of taxes, the BIR has auditing power. There is still a need to pay taxes and the compliance of these businesses needs to be monitored. When it comes to determining the correct amount of taxes, we can investigate that,” he added.

The Supreme Court declared that the BIR Revenue Regulations No. 1-2014 and Revenue Memorandum Circular (RMC) No. 5-2014 “void for being unconstitutional” as it violated the right to privacy.

The regulations require businesses to disclose investor information such as addresses, tax identification number (TIN), and birthdays, among others.

Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think the BIR will be able to collect P2.6 trillion this year even with tax evasion still going on? What do you think should be done to eradicate tax evasion all over the Philippines?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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Middle income earners in the Philippines will have lower income taxes this year

January 19, 2023January 16, 2023carlocarrasco

Recently, it was emphasized that middle income earners here in the Philippines will have lower income taxes to pay in accordance to the Tax Reform for Acceleration and Inclusion (TRAIN) law (Republic Act Number 10963) which will result in better take-home pay this year, according to a news article published by the Philippine News Agency (PNA). This is related to what was reported weeks ago by GMA Network news.

To put things in perspective, posted below is the excerpt from the PNA news report. Some parts in boldface…

Middle-income earners will have lower income taxes this year and thus, higher take-home pay, under Republic Act No 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) law.

Taxpayers earning more than PHP250,000 a year but not over PHP8 million will be subject to lower income tax rates ranging from 15 percent to 30 percent, from the previous 20 percent to 32 percent.

Those with annual taxable income of PHP250,000 or below will continue to be exempt from paying income taxes.

“Inaasahan natin na lalo pang lalakas ang domestic consumption na may malaking kontribusyon sa paglago ng ating ekonomiya. Dahil sa pinababang buwis, mas mataas ang take-home pay ng mga empleyado na magiging malaking tulong sa gitna ng mataas na presyo ng mga bilihin (We expect a stronger domestic consumption which will be big contribution to our economy. With lower tax and higher take-home pay, this will be a good help amid the rising prices of commodities),” Senator Sherwin Gatchalian said in a statement on Monday.

Gatchalian cited the Teacher 1 post, with a monthly salary of PHP25,439 or Salary Grade (SG) 11, will now have monthly tax savings of PHP420.83 or PHP5,050 for the year.

A Nurse III with SG 17 or an entry level monthly income of PHP43,030 will save PHP1,289.13 monthly or PHP15,469 yearly.

“Dahil sa mas mataas ang kanilang kita, inaasahan din natin na magiging maganda itong insentibo para sa mga empleyado na lalo pa nilang paghusayan ang kanilang trabaho at magtulak sa kanila para mag impok o kaya ay mamuhunan (Because of a higher take-home pay, workers will be inspired to work better, save and invest), Gatchalian said.

Also included in the TRAIN law are provisions for small and micro self-employed professionals, who now have the option to pay a simpler, flat tax of eight percent on gross sales in lieu of the income and percentage tax.

Taxpayers can save time falling in line and filing and paying from eight times a year will be reduced to just four.

Estate tax will also be lowered from 20 percent to a single rate of six percent for net estate with standard deduction of PHP5 million as well as exemption for the first PHP10 million for the family home.

Let me end this piece by asking you readers: What is your reaction to this new development? Are you qualified for a reduction of income taxes under the TRAIN Law? Have you consulted with a certified tax expert already?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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Thank you for reading. If you find this article engaging, please click the like button below and also please consider sharing this article to others. If you are looking for a copywriter to create content for your special project or business, check out my services and my portfolio. If you want to support my website, please consider making a donation. Feel free to contact me with a private message. Also please feel free to visit my Facebook page Author Carlo Carrasco and follow me on Twitter at @HavenorFantasy as well as on Tumblr at https://carlocarrasco.tumblr.com/ and on Instagram at https://www.instagram.com/authorcarlocarrasco/.

Bureau of Internal Revenue (BIR) on the lookout for local vloggers who made millions of pesos

August 26, 2021August 24, 2021carlocarrasco

Are you a vlogger based here in the Philippines who made a lot of money recently? Be aware that the Bureau of Internal Revenue (BIR) is on the lookout for vloggers they might find taxable. The other day, it was reported by the Manila Bulletin that the BIR is paying close attention to a certain unidentified couple who allegedly earned between P50 million to P100 million (US$1 million to US$2 million based on the latest foreign exchange rates) that past few years and the deletion of their social media channel was seen to be a move to avoid taxation. It should be noted that the BIR launched a campaign focused on social media influencers or SMIs.

To put things in perspective, posted below is an excerpt from the Manila Bulletin article. Some parts in boldface…

A couple, who reportedly raked in multi-million pesos from video blogging (vlogging), abruptly deleted their social media channel in what the Bureau of Internal Revenue (BIR) officials believe to be an attempt to avoid paying taxes.

Based on the initial investigation of the BIR, the couple earned P50 to P100 million in the past two years which enabled them to buy luxury vehicles and built a mansion somewhere in Metro Manila.

BIR sources said the couple deleted their channel days after BIR Commissioner Caesar R. Dulay announced a crackdown against social media influencers (SMIs) who have been receiving earning huge sum of money from social media platforms like YouTube and Facebook by compelling them to pay taxes.

The couple, BIR officials said, had more than 11 million subscribers. The names of the pair were withheld pending the outcome of the investigation.

But the BIR said it will still run after the couple, saying deleting the social media channel will not excuse them from paying taxes.

Vloggers are classified as self-employed subject to 12 percent value-added tax if annual income is P3 million and more, eight percentage tax if less than the amount and tax exempt if not more than P250,000.

Dulay advised vloggers to be truthful in their income tax declaration to avoid facing tax evasion charges.

The article ended stating that social media influencers cannot hide their respective income because the “tax authorities of countries where the social media platforms are based are obligated to furnish the BIR with their salaries under a tax treaty agreement with the Philippines.”

For the newcomers reading this, the penalties for tax evasion has been updated this year in accordance to the Tax Reform for Acceleration and Inclusion (TRAIN) Act. A person found guilty of tax evasion, the financial penalty is now P500,000 to P10 million. Imprisonment will be 6 to 10 years.

In closing this piece, let me ask you readers: Do you believe that the BIR’s search for qualified vloggers or SMIs to tax is good for the Philippines? Do you believe that your favorite vloggers or SMIs have a legal obligation to pay taxes? Do you believe that the affected vloggers/SMIs will react by promoting/favoring the politicians or potential election candidates who oppose the current administration?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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