Sorsogon Governor Chiz Escudero is urging the Bureau of Internal Revenue to study the possibility of giving taxpayers the option to choose where they want to allocate the taxes they pay to the government as a way of including them in the decision-making process in determining how public coffers should be spent.
Escudero brought up the idea in a recent conversation with bloggers from Mindanao region, during which a new BIR circular reminding social media influencers to pay their personal and business tax obligations and to register with the revenue office as taxpayers was tackled.
According to the former senator, his proposal empowers taxpayers, including digital personalities, to select how their taxes will be put to use, be it in education, infrastructure or agriculture, or even in regions or provinces of their liking.
“This kind of system will work especially for the bloggers because at the end of the day, you will get to see where your money is going,” Escudero explained.
“Mas masarap at masaya ang pakiramdam kung ang bawat taxpayer ay may sey kung saan gagamitin at paano gagamitin ang ambag niyang buwis sa kaban ng bayan,” he said. “Inclusive ito, lahat kasama at walang etsapwera sa pagdedesisyon.”
In the same meeting, Escudero said he supports a government move to tax the income of social media influencers and content creators, but urged the BIR to implement a recently issued memorandum with due diligence in order to encourage compliance by these online personalities.
Escudero said the BIR should conduct a dialogue with bloggers and vloggers to avoid misunderstanding and confusion over Revenue Memorandum Circular 97 the agency issued on Aug. 16.
“Tama lang naman na buwisan (sila),” Escudero said referring to social media influencers. “Ang problema lang dapat i-recognize nila (the BIR) ang tinatawag nating tax treaties at ang Constitution mismo ang sinasabi na bawal ang double taxation,” he added.
He said both parties should check with concerned digital platforms if taxes have already been collected from the country where they are based.
“For example, kung ang buwis sa Amerika ay 30 percent at kung ang buwis dito sa Pilipinas ay 25 percent, wala ka nang kailangan bayaran sa BIR. Ipakita mo lang ‘yung ebidensya na nagbayad ka sa Amerika,” Escudero explained.
The former senator, however, pointed out, the if the tax deduction in the United States is lower than what is imposed in the Philippines, the social media influencer will have to pay the difference.
“Kung ang buwis sa Amerika mas mababa sa buwis sa Pilipinas, yung differential na lang ang babayaran. So, kung 30 percent sa Pilipinas at 20 percent naman sa Amerika, ang babayaran mo lang dapat ay 10 percent. That’s one thing that has to be clarified with the BIR,” according to Escudero.
Under the BIR circular, social media influencers maybe defined as self-employed individuals or persons engaged in trade or business as sole proprietors. In particular, the revenue office said following sources of income are taxable:
- YouTube Partner Program
- Sponsored social and blog posts
- Display advertising
- Becoming a brand representative/ambassador
- Affiliate marketing
- Co-creating product lines
- Promoting own products
- Photo and video sales
- Digital courses, subscriptions, e-books
- Podcasts and webinars
The revenue directive also said that royalties in another country, including payments under the YouTube Partner Program, shall be included in the computation of the gross income of a social media influencer.