It’s about time someone recognised the work that I do. The unpaid work that attracts sneers at high school class gatherings, familiy weddings and Chinese New Year. The unpaid work that salaried schoolmates daydream of and middle-aged relatives cannot fathom the mechanics of.
Those days are at an end as the Singapore government has thankfully recognised our efforts, talent and time by deeming it taxable work. Who can fault the conclusion arrived at by the combined brainpower and thinking ability of a battery of the nation’s best and brightest talents, that likely buzzes with such a frenzy of electrical impulses to power a dystopian machine run city? Although, I believe most wives will still find a loophole if a husband argues along this party line.
The 18th of April is this year’s deadline to electronically file one’s individual income tax and the taxman came knocking at the home (pages) of bloggers. IRAS has made special mention of social media influencers of their need to declare goods and servces rendered unto them in the course of their activities, if they do not belong to a media agency or company. If the blogger is paid an endorsement fee, the items still need to be declared but the tax amount can be listed as a deductable as part of company expenses. Any improperly declared taxable benefits found to be considered fraud or tax evasion can result in penalties that reach up to four times the accessed tax amount.
Why succumb to the onerous burden of paying taxes at all? Well, taxes are indisputably for society’s and ultimately the individual’s benefit. Paying one’s dues is required to upkeep an efficient, effective government. With that comes well maintained cities, public services and a redistribtion of wealth to some degree to assist the needy. Without it, communities could descend into dog-eat-dog, dark age anarchy, where you might even have to dig wells for your own water.
Photo © rawpixels.com | Shutterstock
The online diatribes that erupted in reaction to the previously ignored tax rules stems from the burden that casual, unsalaried bloggers might henceforth have to bear. Businesses, public relations agencies and marketing executives have, in the last few years, been shifting their efforts at courting this group of people and their growing influence on consumers.
The heart of the matter as in all legal matters boils down to definition. The large majority of bloggers do not receive a fee for their review or endorsement of products and services. To an outsider, these could be seen as benefits as they could include coveted items like the latest electronics or expensive beauty treatments. To the blogger, these are perks, no doubt, but generate absolutely no cashflow to foot the tax bill that is generated by it. Neither can these benefits in kind be ingested or used to upkeep a family.
The skewed application of the tax law also grated some raw nerves as it appears to favour big corporations and penalise the individual. One of these is the tax exemption of the same products when the recipient is part of a media agency or has incorporated a company. Instead of having to fork out tax money, as individual bloggers would have to, the tax accessed on an agency blogger could be claimed as business expenses, and thereby lower his or her annual taxable income. The problem is further compounded since most of the items are given and not specifically requested for or chosen by the blogger to begin with – why would one have to pay tax on something that one has no real intention of purchasing?
To add salt to the wounds, many comparisons could be drawn with other forms of giveaways that are not taxed such as company Dinner and Dance giveaways, high society soirees with souvenirs and other social events? It looks as if the maligned group is a victim of prejudice for the unremunerated task of reviewing product and service samples. “If my currency is a dinner or a stick of lip balm, how about paying taxes with the same coin?” some have been heard to mutter begrudgingly on forums.
In the end, what is Caesar’s will be rendered to Caesar, but where will that leave the industry? The downsides I suspect will be a lessened democratisation of reviews as there will be a smaller pool of people willing to bear the taxes or able to claim an exemption. There will also be a consolidation of bloggers settling into agencies. The counter argument that has been lost in the frenzy of anxious panic is: how large will the individual impact be? What is the value of goods and services that a typical blogger will receive in the course of a year, and would the amount be significant enough to bump one into the next tax bracket?
What is also lost in the miasma of knee-jerk doom and gloom is the potential benefits. The twin bugbears of pay and industry standards would likely be raised as an unintended effect of the tax burden. The expectation of free work could dissipate when there are real expenses incurred. In a sense, there will be an increased perception of the work done by bloggers who are journalists, writers and poets at heart. Professional standards in the industry as those unwilling to pay tax, unable to earn enough to negate the effects of the tax or not of sufficient calibre to be taken under the wing of an agency will have to bow out of the business.
There are still many details to be ironed out before the full force of the tax laws should come to bear upon the hoi polloi of the blogging world. One such idea raised by Jill Lim of Deloitte Singapore, as quoted by The Strait Times, is to raise the tax exempt treshold for non-monetary benefits in this nascent industry. It is patently clear that a cursory consideration in applying this tax to the affected group is inadaquate. Where is our Elron Musk to lead us in these uncertain times?
