In this world, nothing [can be] said to be certain, except death and taxes,” American statesman Benjamin Franklin wrote three centuries ago.
But every so often, certain groups of people tend to ignore this maxim. In this digital age, so-called social media influencers, who make a lucrative career out of endorsing products or services to their followers, seem to have conveniently forgotten about this life certainty and need to be reminded with the force of law.
The Bureau of Internal Revenue (BIR) has made a bold decision to go after social media influencers who have been evading their fair share of taxes.
While tax evasion has been resorted to occasionally in these parts, that is not a crime to be taken lightly. The law is clear that any income that any Filipino derives in exchange for a value or service they provide is taxable.
It doesn’t matter if that payment comes in the form of cash, gift certificates, or other forms of “freebies” like products, services, trips, or weekend accommodations in some exotic resort in exchange for posting a “pic” of one sauntering on the beach for one’s millions of Instagram followers to see. It is an exchange of one value for another, it is taxable. And not paying these taxes—without even the slightest pretense of transforming the illegal “tax evasion” into legal “tax avoidance”—is a felony.
No special laws are needed for these taxes to be levied from influencers, although a revenue regulation from the tax authority may be in order for both enforcers and potential taxpayers to be reminded that everyone operating in the newfangled digital spaces has just as much obligation to contribute financially to the proper working of our government and this country in general.
Social media influencers drive on public roads, live under the blanket of security that law enforcers provide, and benefit from the government’s multitude of services (however inefficient) just as the humble shopping mall saleslady does and, as such, both are obligated to their upkeep.
One can almost predict the expected response of an individual who grumbles about paying the right amount of taxes: “Why should I pay taxes if I’m getting bad service from the government or if the money is just being stolen?”
Right off the bat, let us just say that that excuse is invalid and falls flat in the face of all other humble employees who have no opportunity to avoid taxes because they are levied straight off their paychecks every month. Being popular on social media does not exempt one from this.
That the BIR has not clamped down on these activities earlier is, of course, a matter of discretion.
Incidentally, social media influencers are also liable for back taxes for all the payments and considerations they received from their clients all these years. And it doesn’t matter if they deactivate their accounts because, thankfully, “the internet is forever” as the saying goes. Digital traces of these taxable events are present in the servers of these social media apps somewhere. All the BIR needs to do is to invoke cross-border agreements the agency entered into with their overseas counterparts in previous administrations and they can demand these digital records which can form the basis of their tax assessments.
But the BIR doesn’t even have to go that far back or be that strict.
One option available to our tax authorities is to open an amnesty program where these influencers can get their offenses expunged from the record in exchange for a one-time settlement for their past infractions while committing to pay their taxes faithfully going forward.
It’s better for them to cough up a relatively small amount of money now than to spend their wealth on expensive lawyers on cases that will drag on for years. That kind of stress is bad for their work and physical attractiveness as influencers. Worse, they might even end up in jail as someone who is made an example of by the government to exact compliance from the rest of the public.
What will help the BIR in this regard is that long-discussed project of acquiring financial intelligence software that will help authorities trace all transactions done in the digital space, keep track of ongoing deals and electronically sniff out taxable events in the past.
Our tax authorities need all the support they can get from President Marcos as the government struggles to dig itself out of the deep fiscal hole that the previous administration left our country in.
That Mr. Marcos’ election victory came, to a significant degree, with the invaluable help that social media influencers provided is nothing less than a litmus test of his administration’s commitment to correcting the social iniquities that this country has long suffered under.
Taxing social media influencers is, simply put, the right thing to do.