BIR’s next target: Airbnbs

Potential new source of revenue, official says

By: Ben O. de Vera, Philippine Daily Inquirer, Aug 27, 2019

As more travelers and even those who go on “staycation” now book their accommodations online through Airbnb, the taxman is looking into tighter monitoring of tax compliance of Airbnb property owners.

While the Bureau of Internal Revenue (BIR) still has no initiative specifically targeting Airbnb owners’ tax payments, Deputy Commissioner Marissa O. Cabreros said in an interview last week that it was a potential new source of additional revenue for the country’s biggest tax-collection agency.

Cabreros noted that Airbnb rentals might indeed be cheaper than the rates of traditional accommodation facilities as some of them might not be paying the correct taxes.

“It’s part of those ‘think-outside-the-box’ initiative of our RDOs [revenue district offices]—look for new sources of revenue, that’s one of them. However, as to how and whether they are successful in doing it, how many have they found leasing [through Airbnb], I don’t have data,” she said.

Cabreros said former Revenue Commissioner Kim S. Jacinto-Henares had already issued regulations on online businesses saying “they are required to register.”

“So it’s a matter of strict policing and enforcement activity for the BIR,” she added.

However, Cabreros admitted that going after Airbnbs might be a challenge.

For one, Airbnb had yet to require formal business registration from their leasing partners and advertisers, Cabreros noted.

“On Airbnb, you can lease your personal property. In that aspect, it’s difficult to monitor all of the advertisements there and check if they had declared income tax,” she said.

“So we only have estimation—we could impute that [Airbnb rentals] income. But as to actual [incomes], these are things that are a challenge to tax administration,” Cabreros said, adding that this could mean the BIR needed to research if registered properties were being leased online.

It also doesn’t help that some Airbnb unit owners hire third parties to manage their bookings—making it difficult to track down the taxpayer responsible to pay the income and leasing taxes due.