This article was originally on GET.com at: IRAS Wants Bloggers To Declare Sponsored Items: 2
Reasons Why That May Be Impractical
It is tax season in Singapore right now. This is the time of the
year when eligible income earners scramble to file their taxes or
risk paying a penalty should one under-declare or forget to
declare, whichever the case may be.
If you’ve been keeping up with local news lately, our taxman has
caused much distress for our Singaporean social media darlings who
make tons of money and receive more than enough products to last a
lifetime doing the fun and ostensibly glamorous things that they
do, by sending them a memoregarding declaration of sponsored items
received. Without favouring any side, here are 2 reasons why we
at GET.com think this requirement may be
impractical.
1. There Are Just Too Many Loopholes
It doesn’t take a prodigy to realise that there are simply too many
loopholes out there to render IRAS’ efforts in tracking down tax
returns 100% foolproof.
According to IRAS’ FAQ for social media influencers, they’ve
made clear that the income somebody “received from social media
marketing activities such as blogging, YouTubing, etc. will be
assessed as self-employed income once it is ascertained that you
are carrying on a trade or business”.
Well, does this mean that IRAS will be working hard to keep tabs on
who is active on social media making a living out of it and who’s
not?
Seriously, there are so many small-time bloggers and Instagrammers
across the globe and in Singapore - how is it even possible to
track down every single one of these bloggers or “social media
influencers” regardless of their popularity and/or outreach?
Good luck to whoever’s been tasked to trawl the internet and
various social media platforms where such marketing activities are
carried out!
Besides, many social media influencers attend events,
invites, overseas trips and receive all sorts of perks and products
provided to them by brands’ own initiatives, how are they supposed
to remember which ones they’ve been to, how much a meal at a fancy
gastropub costs, how much a limited edition jacket or a
swanky hotel room
costs, etc?
2. Inefficiency Is Not Cool
As though keeping up with making money and surviving in Singapore
isn’t tough enough already, this clause that’s recently in the
spotlight is set to create a lot more inefficiencies. And
inefficiencies are bad because there are costs and opportunity
costs involved.
Not only does the taxman and his squad need to spend sizeable
amounts of time and energy tracking down bloggers and ensuring that
whatever is being declared is accurate, busy social media
influencers have to set aside time to slowly scour through the back
of their heads (or emails, messages, calls, skype conversations and
what have you) recalling how much each taxable sponsored item
costs.
Will this be a case of a tax law that costs more to enforce than
what it can bring in in terms of tax revenue?
