PETALING JAYA: The Inland Revenue Board (LHDN) is adopting a “friendly approach” when it comes to taxing income earned by “influencers”, who typically make a living by endorsing products or services on social media.
For a start, LHDN wants to create more awareness that influencers are taxable when their earnings, whether in cash or in kind, cross a certain threshold.
“Some from the younger generation don’t have much awareness on the importance to declare their income and pay taxes, ” said LHDN corporate services director Hishamudin Mohamed.
“So, we want to explain this to them so they will be more willing to come forward to declare and pay their income taxes, ” he told reporters during an educational workshop organised yesterday by SushiVid Sdn Bhd, an influencer marketing company.
“The public needs to be aware of the role of taxation in national development.
“If they don’t understand or have awareness, then they won’t know their responsibilities.
“So what we are doing is to provide that awareness to them so it will help them to come forward without being forced” he said.
Hishamudin hopes that workshops such as the one organised by SushiVid will encourage influencers to use their platforms and spread awareness to their friends and followers.
SushiVid founder and chief executive officer Foong Yuh Wen said influencer marketing is a type of shared economy similar to e-hailing or accommodation sharing platforms.
Influencers provide professional services such as creative video productions, blogs, social media postings and more through their platforms based on requirements from brands.
“Although this model is progressing well in the industry, it is still considered fairly new to the government to fully understand our form of business.
“Hence, we are happy to work with LHDN in providing a platform to fellow influencers so that they understand their responsibilities when it comes to taxation, ” Foong said, adding that the workshop also provided a good opportunity for LHDN to understand influencer marketing.
Workshop participant, Adzrin Mansor, said he used to pay tax when he was employed.
“But now that I have started my own thing, I am starting to learn how to (be a social influencer) and run it as a business.
“I am still learning but the workshop is rather fruitful, ” he said.
Eden See, who entered the industry about a year ago, is unaware that he has to declare his income as an influencer.
“I didn’t know until today that influencers too have to pay taxes if they meet the criteria.
“It is good to know that our contribution can support and play a role in the development of the country, ” he said.
According to the LHDN website, any individual earning more than RM34,000 per annum after Employees’ Provident Fund deduction has to register a tax file.