The very recent move by the tax man in
Singapore to force bloggers to declare gifts in exchange as a form of taxable
income will no doubt have an echoing effect through the Public relations
industry.
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| Source - www.amiehu.com |
It’s not about whether or not the blogger
should pay income tax, or whether the blogger is doing this for commercial
venture or hobby; for our industry it is now going to become about how to
engage with bloggers as KOL’s, ambassadors, and/or even reviewers in such a way
that does not expose them to undue tax obligations.
Such a fundamental change to the system
will have its flow on effects – and one source of traditionally cost-effective
publicity for us, bloggers, may now end up having to be engaged in a very
different way.
For the lay-blogger, the impact will
probably be nil – they will continue with their social commentaries on their
own, pay-as-they-go and honest review approach – great for PR (assuming they
like their purchase experience). But for the professional blogger, those who
take it far more seriously than a hobby – and for the PR who engage with them –
the impact will be more significant.
It may result in a changing paradigm of
engagement – as they look for ways to incur tax-deductable expenses, minimize their
“reported revenue (in kind)”, and generally try to avoid taxation obligations.
Ultimately, as we engage with bloggers, the traditional model of offering a
free product (which is a tax deductible expense for clients in most cases) will
change, as we have to adjust our way of incentivising bloggers in order to help
them legally minimise their expenses.
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| Source - www.clotureclub.com |
Worst case, some of our bloggers whom we
have come to love and trust, may simply call it a day. After all, it’s a
secondary income (in some countries, that is taxed at a higher rate), the
inconvenience of the extra work load for filing tax (you know, keeping accurate
records, assessing market value of goods and services in kind, etc) may simply
outweigh the benefits or simply the time available. PR loses, along with the
bloggers audience.
Certainly, for those popular bloggers who
have a high volume, they will look at how to streamline their activities to be
run more along business lines; which ultimately, the cost of, will be passed to
our clients.
Luckily we don’t live in Singapore, but
once it’s firmly rooted there, the coffers that seek cash in Malaysia will no
doubt latch on to the concept to boost earnings, and a similar outcry will be
heard here.
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