Philippine taxman probes 250 social media stars, seeking revenue for Covid-19 battered economy

The Philippines has launched an investigation into 250 social media stars, ‘clarifying’ their tax obligations and warning them that freebies received in return for promotional services are also liable to tax

As it seeks to revive its Covid-battered economy, Manila also plans to raise taxes on offshore gaming companies, or Pogos, but critics say a focus on the country’s billionaires would be more bountiful

Reading Time:4 minutes

Some 70 per cent of Filipinos told a recent survey they had bought something after it was endorsed by a social media influencer. Photo: EPA

Published: 7:00pm, 28 Sep 2021Updated: 9:09pm, 29 Sep 2021

Being the centre of attention is usually a lucrative prospect for a social media star. But scores of influencers in the Philippines may be about to find out that the spotlight can be costly too.

The country’s Bureau of Internal Revenue is investigating 250 social media influencers to see if they are paying their taxes, in a development Manila has described as “clarifying” the tax obligations of influencers and “reminding” them of the consequences of tax evasion.

The move, which the government says will raise revenue from influencers’ undeclared income, comes as the Philippines seeks to offset rising debt following a massive economic hit from the coronavirus pandemic. The country’s GDP shrank 9.5 per cent in 2020, the economy’s worst performance since 1947. In addition to its probe into influencers, the bureau has announced a plan to raise taxes on offshore gambling companies.

The bureau said recently it had received tip offs that some social media influencers had not been properly declaring their incomes and were paying too little tax, though it did not identify any of the influencers it was probing.

“We have the profiles of over 250 personalities that we are investigating and we will ensure they pay the necessary corresponding tax on their earnings,” said Arnel Guballa, the bureau’s deputy commissioner.

The investigation will cover influencers who earn money from YouTube’s partner programme, sponsored posts, digital advertising, brand ambassadorship, and online sales.

A memo by the bureau said that influencers would also be taxed on “free” goods they received in exchange for promotions and that tax would be calculated according to the value of the products they had received.