New tax guidelines put pressure on Malaysian influencers

 

SOCIAL media influencers in Malaysia are grappling with new tax guidelines issued by the Inland Revenue Board on January 14, which require them to declare all forms of income, including free products and services received for reviews or promotions.

The guidelines do not specify a minimum value for such freebies, leaving many creators concerned about the practicality of tracking every item.

An influencer told Channel News Asia that content creators often receive numerous inexpensive samples from online sellers, making it difficult to record and declare each one.

She suggested that only gifts or services worth more than RM200 should be subject to declaration, warning that stricter rules could discourage small creators from accepting samples to build their profiles.

A local accountancy firm explained that while Malaysia’s tax law has always treated income from business or professional activities as taxable, the treatment of gifts and sponsored experiences was previously unclear.

The new guidelines provide clarity, encouraging voluntary compliance and ensuring fairness in the tax system.

Industry reports highlight the growing importance of influencer marketing, valued at RM150 mil in 2023 and projected to exceed RM300 mil by 2026, driven by consumer trust in digital creators.

Observers and industry players told CNA that Malaysia’s new tax guidelines for influencers will improve transparency and accountability, while protecting creators by encouraging cash payments instead of gifts.

However, concerns were raised that smaller influencers could face heavier burdens as they often accept free products or services rather than cash.

Questions also emerged about whether PR gifts, unpaid promotions, or past freebies should be declared in upcoming tax filings.

Under current rules, individuals without business income must file returns by April 30, while those carrying on business have until June 30 of the following year. —Focus Malaysia