BIR attempts ‘friendly’ tack
As it aims to collect P3 T this year
February is not just the love month, it also marks the start of a yearlong campaign for the Bureau of Internal Revenue (BIR) to encourage the public to pay their tax obligations. After all, collecting P3.05 trillion is no easy task.
The BIR kicked off last month its national tax campaign with a grand event attended by large taxpayers, social media influencers and BIR partners from both the private and public sector as part of its annual effort to generate more income for the government.
Apart from the reminder to file one’s income tax return or a company’s value added-tax (VAT) return on time, Internal Revenue Commissioner Romeo Lumagui boasted how the revenue agency has made it much easier for everyone to settle their taxes, no matter how big or small they are.
BIR electronic filings have increased versus manual filing with 2.1-million e-filers in 2023, up five percent from a year ago. Roughly 68 percent of registered tax payers also prefer to file their taxes electronically. Overall, the tax base has broadened to 5.5 million registered business taxpayers.
Lumagui also used the campaign to encourage more social media influencers and content creators to comply with tax laws amid a widening adoption of various social media platforms as a lucrative source of income. This has been one of BIR’s priorities last year.
“So far, it’s been good, many have complied and more are communicating that they want to comply. Actually, there were a lot of influencers who wanted to join the kick off,” Lumagui said.
“They have seen the soft approach that we are here to help them. They don’t have to be afraid. We expect more social media influencers to pay their taxes this year,” he said.
BIR defines social media influencers as people whose digital posts are being monetized, classifying them as self-employed individuals or persons engaged in trade or business as sole proprietors.
Based on BIR regulations, influencers are required to pay income tax and percentage tax or VAT, if applicable, as mandated by the Tax Code.
Social media influencers and content creators derive their income from YouTube, sponsored social and blog posts, display advertising and affiliate marketing, among others. Those who receive merchandise or products in exchange for promotions must also declare as income the fair market value of such products.
Content creator and entrepreneur Rosmar Tan, who participated in the kickoff, admitted that she used to be afraid of BIR’s tax mapping, an initiative where examiners visit companies to check on their tax compliance.
Rosmar trended late last year after flexing that she’s earning at least P5 million to as much as P13 million daily from her business. Rosmar has nearly 20 million followers and has sold about 2.4 million products via her TikTok shop alone.
Netizens were quick to compute that Rosmar’s tax liabilities could reach more than P500 million.
“BIR is not scary for as long as you comply, especially now that paying can be done online,” she said.
For young entrepreneur and Softbox Patisserie head baker Nikki Mencenares, it is essential, even for small entrepreneurs, to pay their taxes as a way to be socially responsible.
Micro, small and medium enterprises (MSMEs) like Softbox Patisserie are a big part of the country’s economic growth, taking up 99.5 percent of all business enterprises and accounting for over 60 percent of total employment in the Philippines.
While the pandemic impacted MSMEs, it also opened opportunities for new ones to sprout because of the shift to online platforms.
“Registering with the BIR and paying taxes builds trust with customers that your products and services are legitimate. When you plan to scale up your business, you already know the way around the bureaucracy and it won’t be as hard to comply anymore,” Mencenares said.
Singer and host Christian Bautista shared that as a celebrity, he used to let his management handle his tax obligations, but years later, a sense of responsibility to understand the other side of being in showbiz developed.
“It is showbiz, all eyes are on us so we have to be responsible for what we do, especially in paying taxes. I think we are more trusted if we have proper tax filing,” he said.
Ayala Corp., the country’s oldest conglomerate, noted that one way to pay correct taxes is to be always updated with all relevant regulations.
Ayala Corp. tax counsel Mildo Flor Sison said that it is important that all of Ayala companies and books of accounts are registered with the BIR.
Firms are urged to take advantage of BIR’s computerized accounting system to ensure that transactions are recorded in a timely and direct manner.
“It is always cheaper to comply than to pay penalties,” Sison said.
This year’s tax campaign carries the theme “Sa Tamang Buwis, Pagasenso’y Mabilis” as BIR seeks the support of taxpayers in generating funds for the country’s economic recovery and development.
“Taxes are the lifeblood of the government, we will not run if we don’t have funds,” Lumagui said.
“If we collect more, we will have more funds that we can use for infrastructure projects and social welfare and development,” he said.
“They have seen the soft approach that we are here to help them. They don’t have to be afraid. We expect more social media influencers to pay their taxes this year.”