Resolution urging BIR to suspend tax memo on online sellers filed at Senate

Robie de Guzman   •   June 23, 2020   •   826

MANILA, Philippines – Senator Risa Hontiveros on Tuesday said she has filed a resolution seeking for the suspension of the Bureau of Internal Revenue (BIR) memo that mandates online sellers to register and pay taxes amid struggles of finding alternative means to earn money during the coronavirus disease (COVID-19) pandemic.

In a statement, Hontiveros said she recently filed Senate Resolution No. 453 which urges the BIR to suspend the memo’s implementation “until the end of the year.”

The resolution also sought for a Senate investigation into the agency’s efforts to subject online sellers to taxation and registration requirements, which was criticized by many for being “ill-timed and insensitive.”

“Kung hahabulin ng pamahalaan ang malalaking digital entrepreneurs, dapat siguraduhing hindi nito pahihirapan ang maliliit na online seller na dumidiskarte ngayon para kumita. Our revenue policies should be sensitive to the struggles of Filipinos trying to make ends meet in these difficult times,” Hontiveros said.

Malacañang earlier clarified that not all online sellers will need to pay taxes but should still register their business and update their tax records. The Palace also stressed that those earning less than P250,000 annually are tax exempt, referring to a provision of the Tax Reform Acceleration and Inclusion (TRAIN) Law which states that only income above P250,000 is subject to taxes.

The Department of Trade and Industry also backed BIR’s move, saying the registration requirement only aims to build a registry of online sellers.

While Hontiveros noted Malacañang’s clarification, she said the registration requirement may still cost online sellers thousands of pesos in fees.

“It is best for everybody’s interests if the BIR suspends the implementation of the memo until December 31, 2020, while government agencies review and craft better policy guidelines on how online entrepreneurs should register or pay taxes,” she said.

The senator also pushed for a digital platform for BIR registration instead of requiring applicants to physically troop to its offices.

“Magkaroon muna ng digital platform for registration. Requiring people to congregate at the BIR’s offices likewise exposes them to the health risks associated with COVID-19 and might also lead to further spreading the disease and prolonging the pandemic,” she said.

She also reiterated her earlier call for the government to prioritize the collection of tax duties of Philippine Offshore Gaming Operators (POGO) rather than individuals who are making temporarily living via social media channels to weather the economic effects of the pandemic.

“It is only proper for the BIR to ensure that big digital businesses earning millions in profits – such as Philippine Online Gaming Operators (POGOs) – are paying proper taxes as required by law. Pero sana, huwag na pahirapan ang mga kababayan nating dumidiskarte para makakain,” Hontiveros said.

BIR to probe tax compliance of initial 250 social media influencers

Robie de Guzman   •   September 16, 2021

MANILA, Philippines – The Bureau of Internal Revenue (BIR) is set to launch an investigation into the initial list of 250 social media influencers to check on their tax compliance.

In a report to Department of Finance (DOF) Secretary Carlos Dominguez III, the BIR said that Letters of Authority (LOAs) for the conduct of investigation have been issued to certain social media influencers found to be “top earners.”

The BIR said that social media personalities who earn money from their posts on digital media are classified as self-employed individuals or persons engaged in trade or business as sole proprietors.

Their earnings are generally considered as business income as defined under BIR’s Revenue Memorandum Circular (RMC) No. 97-2021 issued last Aug. 16, the bureau added.

“We encourage them to register, and then we have the profiling of over 250 personalities. We will do the investigation so that they would pay the necessary corresponding tax on their earnings,” BIR Deputy Commissioner Arnel Guballa said in his report to Dominguez.

Under RMC 97-2021 issued in August, social media influencers should pay income tax and percentage tax or, if applicable, the value-added tax (VAT), as mandated under the National Internal Revenue Code (NIRC) and other existing laws.

Based on the Circular, social media influencers are defined as those who derive their income from the following sources:

  1. a) You Tube Partner Program;
  2. b) sponsored social and blog posts;
  3. c) display advertising;
  4. d) becoming a brand representative/ambassador;
  5. e) affiliate marketing;
  6. f) co-creating product lines;
  7. g) promoting own products;
  8. h) photo and video sales;
  9. i) digital courses, subscriptions, e-books;
    j) podcasts and webinars

The Circular states, among others, that social media influencers who receive free goods in exchange for promotions must declare as income the fair market value of these products.

Income treated as royalties from another country, including payments under the YouTube Partner Program, shall likewise be included in the computation of the gross income of the socmed influencer and shall be subject to tax.

“It must 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 the relevant tax treaties. The BIR has the means to verify their income as it is clothed with a special power to obtain information from its treaty partners. The BIR may safely rely on the data provided by its treaty partners to establish the influencer’s tax liability,” RMC 97-2021 stated.

“The social media influencers are, therefore, advised to voluntary and truthfully declare their income and pay their corresponding taxes without waiting for a formal investigation to be conducted by the BIR to avoid being liable for tax evasion and for the civil penalty of fifty percent (50 percent) of the tax or of the deficiency tax,” it added.

In order to avoid the risks of double taxation, the BIR advised social media influencers receiving income from a non-resident person residing in a country, with which the Philippines has a tax treaty, to inform the latter that they are residents of the Philippines, and are, therefore, entitled to claim treaty benefits provided under the relevant tax agreement.

The Circular said social media influencers who “willfully attempt to evade the payment of tax or willfully fail to make a tax return, to supply accurate and correct information or to pay tax” shall, in addition to the payment of taxes and corresponding penalties, be held criminally liable under the Tax Code.

Social media influencers na hindi nagbabayad ng buwis, tinutukoy na — BIR

Robie de Guzman   •   August 24, 2021

MANILA, Philippines — Sinimulan na ng Bureau of Internal Revenue (BIR) ang proseso sa pagtukoy sa social media influencers na maaaring kasuhan dahil sa hindi pagbabayad ng buwis.

Ayon kay Atty. Marisa Cabreros, ang deputy commissioner for legal group ng BIR, bahagi ito ng mandato ng ahensiya na habulin at papanagutin ang mga tax evader.

Ani Cabreros, ang sinumang kumikita sa pamamagitan ng alinmang social media platforms ay obligadong magpa-rehistro at ideklara ang kanilang kinikita sa BIR.

Sakop nito ang mga gumagawa ng online content o nag-eendorso ng mga produkto gaya halimbawa ng mga vlogger o Youtubers.

“Basta lahat po ng ating mga nasa online ang means of kita, kumikita sila binabayaran sila sa kahit anong klase ng serbisyo na ginagawa online… Lahat po ng taxpayers, indibidwal at korporasyon na tumatanggap ng income, in-cash or in-kind na ginagamit ang media site or any other platform at any activity perform on those sites and platform basta kumikita sila,” ani Cabreros.

“Because of it sila po ang tinutukoy natin na kailangang magrehistro, yun nga lang po ang mga famous as example are our Youtubers, yung nag-live streaming sa Facebook, Instagram, Twitter, Tiktok, Reddit, Snapshot and all other platforms po,” dagdag pa niya.

Pero paglilinaw ng BIR, hindi lahat ng social media influencers ay pagbabayarin ng buwis.

Aniya, ang small time social media influencers na may annual net income ng hindi hihigit sa P250,000 ay exempted sa pagbabayad ng tax alinsunod sa Tax Reform for Acceleration and Inclusion Law.

Kaya wala umano silang dapat na ipag-alala at sa halip ay kinakailangan lamang na magparehistro at ideklara ang kanilang negosyo.

“Kaya yung sinasabi ng iba na maliit lang kami wala naman kaming gaanong kinikita pa, wala po silang dapat ikatakot,” ani Cabreros.

Babala ng BIR, maaaring maharap sa kaso ang sinumang social media influencer na hindi magdedeklara ng kanilang kita o kaya ay hindi nagbabayad ng tamang buwis.

Maaari din silang kasuhan sa hindi pagpapa-rehistro, hindi mag-iisyu ng resibo at tax fraud.

Posibleng makulong ng hindi bababa sa anim na taon at pagmultahin ng hanggang P10 miylyon ang sinomang hindi magbabayad ng tamang buwis. RRD (mula sa ulat ni Correspondent Marvin Calas)

Senate seeks probe on alleged DOH mismanagement of P67-B COVID-19 fund

Aileen Cerrudo   •   August 12, 2021

MANILA, Philippines — The Senate wants to look into the alleged mismanagement of funds of the Department of Health (DOH) allotted for the coronavirus disease (COVID-19) response.

After the recent assessment of the Commission on Audit (COA), senators are seeking to investigate the deficiencies on the DOH’s P67.32 billion COVID-19 budget.

COA attributed the said deficiencies to the health department’s non-compliance with pertinent laws and regulations, including the use of funds not for the intended purpose.

Senator Grace Poe said this proves to be counter-beneficial to the government’s efforts to curb the spread of the disease at a crucial time.

“These funds were provided to strengthen the agency’s health resources in light of the COVID-19 pandemic, but the implementation deficiencies denied our countrymen their right to health at a time when it is most needed,” she said.

Senate Minority Leader Franklin Drilon said the Senate should “particularly look into the P3.97 billion worth of contracts and projects with procedural deficiencies in the procurement process and lacking documentation.”

“It is imperative that we examine closely the DOH’s use of billions of pesos in COVID-19 response funds given the findings of the COA and the corruption allegations that hounded the agency’s procurement of various COVID-19 equipment and supplies,” Drilon said.

Drilon said DOH Secretary Francisco Duque III’s ineptitude is sabotaging the government’s response to the pandemic.

“While we see a shortage of beds, PPEs, ventilators, oxygen tanks, the DOH incurred P24.64 billion in unobligated funds that could have augmented our medical resources and paid on time the risk allowance of our medical frontliners,” Drilon said.

Meanwhile, Senator Risa Hontiveros said the country needs commitment and competence from the DOH leadership to ensure every peso budgeted and allocated would save lives.

“Given the COA findings, the DOH seems to be depriving thousands of Filipinos of healthcare services in the face of national emergency and it is nothing short of criminal,” she said. AAC

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