PETALING JAYA: The Inland Revenue Board of Malaysia (IRB) has revealed that an increasing number of online influencers and social media earners are coming forward to declare their taxes, driven by concerns over potential repercussions.
IRB chief executive officer Datuk Abu Tariq Jamaluddin told The Star that tax compliance within this group has seen an almost four-fold increase, jumping from 390 files in 2023 to 1,250 as of April this year.
In the world of marketing, influencers are individuals with the ability to influence potential buyers through product or service promotions and recommendations on social media platforms.
Based on a survey by a local marketing firm, it is understood that influencers with up to 50,000 followers can earn an average monthly income of between RM10,000 and RM15,000, while those with over 500,000 followers can potentially earn between RM50,000 and RM100,000 per month.
Additionally, many social influencers can earn as much as RM5,000 to RM6,000 per social media post or video.
As of April, 86 influencers have opened their tax files and paid a total of RM908,325 in taxes, he disclosed.
Abu Tariq said the rising compliance rates was due to LHDN’s engagement efforts with prominent local influencers by encouraging them to promote tax payments within their circles as well as “nudging” tactics to guide them towards decisions that benefit them in the long run.
“Each state has a dedicated unit with officers monitoring local influencers or those offering sales on TikTok or Instagram. Our officers also send out official emails to the individuals concerned, advising them to comply,“ he was quoted as saying.
He also mentioned that “nudging” activities showed an increase, with 649 emails sent out in 2020 and 704 in 2022.
Of this, 16,719 declarations were from companies with tax revenue amounting to RM492.043 million, 71,558 individual declarations (RM244.606 million), 8,196 stamp duties (RM16.38 million), and 704 real property gains tax (RM137 million).
Under LHDN regulations, anyone earning an annual income of RM30,000 or more through sales or services must declare their income.
Abu Tariq said keeping track of them is relatively straightforward, as most of their information is readily available in the public domain.
On the other hand, an influencer could also be summoned to explain sudden asset gains that do not align with their existing personal income declaration.
He added that out of the 450 influencers who came forward in 2020, 165 cases were audited by LHDN to obtain additional information, resulting in the collection of RM963,889 in additional taxes.
In 2021, an additional RM2.06 million in taxes were collected from 89 influencers who were audited out of the 486 who declared their incomes.
