Advertising has always been an efficient tool or method used by large to small scale businesses to introduce their brands, products and services to the general population. Today, the marketing strategy has adapted from the regular television and magazine through the use of online or social media platforms wherein a majority of the populace of the Philippines spend their time for entertainment, leisure or acquiring their needs and wants.
Conventionally the advertising of brands, products and services were specifically catered to famous celebrities however nowadays this common norm in marketing has also shifted to the ordinary person or who we identify today as “Influencers”. These influencers who have significantly contributed their creativity, knowledge and expertise of a brand, product and service have efficiently garnered numerous followers on Instagram, Facebook, YouTube and other social media applications. Due to their capability to advertise and diversify these well-known brands, products and service to consumers, social media influencers have become the present sponsors of businesses in order to generate more revenues for their established brands, product or service and in turn where the influencers derive significant amounts of profit. However, not lagging behind this trend is the inherent power of the government to impose tax to these individuals.
On August 16, 2021, the Bureau of Internal Revenue had issued Revenue Memorandum Circular No. 97-2021 which imposes tax on any income received by social media influencers. Section 3, of the abovementioned Circular defined “Social Media Influencers” to wit:
“ The term “social media influencers” referred to in this Circular includes all taxpayers, individuals or corporations, receiving income, in cash or in kind, from any social media sites and platforms (YouTube, Facebook, Instagram, Twitter, TikTok, Reddit, Snapchat, etc.) in exchange for services performed as bloggers, video bloggers or “vloggers” or as an influencer, in general, and from any other activities performed on such social media sites and platforms.”
To be considered as gains or profit as a social media influencer, Section 4 of the Circular provided the following, to wit:
“To constitute gains or profits from the conduct of trade or business, the payments must be received by a social media influencer in consideration for services rendered or to be rendered, irrespective of the manner or form of payment. Therefore, if a social media influencer receives free product in exchange for the promotion thereof on his/her/it YouTube channel or other social media accounts, he/she/it must declare the fair market value of such product as income.”
Unregistered social media influencers are required by law to register with the Revenue District Officer (“RDO” for brevity) as provided by Section 6 of the Circular, to wit:
“A. Registration and updates
Section 236(A) of the NIRC states that every person subject to internal revenue taxes are required to register with the appropriate Revenue District Officer (RDO) while paragraph (E) thereof states that any person registered shall, whenever applicable, update his registration information with the Revenue District Office where he is registered, specifying therein any change in type and other taxpayer details.
X X X “RMC No. 97-2021
Under the RMC No. 97-2021, social media influencers shall be liable to income tax if their annual income exceeds Two Hundred Fifty Thousand Pesos (Php 250,000.00), and shall be liable to value added tax if an individual taxpayer gross revenue exceeds Three Million Pesos (Php 3,000,000.00) a year. Lastly, if the tax payers gross revenue does not exceed Three Million Pesos (Php 3,000,000.00) a year they shall be liable to other percentage taxes pursuant to the provisions of the National Internal Revenue Code.
Compliance with the law is the responsibility of every citizen, more so to individuals who contribute growth to an economy. By undergoing the process to comply and be register with the appropriate RDO of the Bureau of Internal Revenue, influencers are given the admirable opportunity to set an example to other unregistered taxpayers in the Philippines.
 BIR Revenue Memorandum Circular No. 97-2021