Flashy social influencers squarely in the taxman’s sights

CYBERJAYA: You may have seen them on social media – influencers who seem inordinately wealthy.

They put on an ostentatious display of luxury cars and properties on TikTok, Instagram or other social media channels to draw likes, accolades and envy from followers.

But they better beware, as the taxman is also among their followers and watching them with an eagle eye.

The Inland Revenue Board (LHDN) is monitoring various social media and ecommerce platforms, targeting individuals who frequently show off their wealth.

“For those flaunting cash or showing off expensive cars and properties on your social media, know that we are monitoring and will conduct checks to see whether they have been compliant in reporting and paying their taxes,” said LHDN chief executive officer Datuk Dr Abu Tariq Jamaluddin.

Digital entrepreneurs and social media influencers, especially those with a penchant for displaying cash and luxury items online, are among those being monitored and identified for tax evasion.

In fact, a special unit in the LHDN has been strengthened to zoom in on the activities of influencers and digital entrepreneurs.

Called the Digital and Behavioural Insights Economy Section (Debis), the unit housed under the LHDN’s Tax Compliance Department was formerly known as the Digital Economy Audit Section (DEAS).

Debis serves two main purposes. The first is to perform tax activity operations, while the second is “tax nudging”, which is the use of behavioural intervention to increase tax compliance, such as sending reminder letters and simplifying tax forms.

Abu Tariq said Debis conducts continuous monitoring activities on websites and social media platforms such as Facebook, Instagram, WeChat, WhatsApp, Telegram and blogs.

It also identifies new business models implemented by ecommerce taxpayers.

“Debis also implements awareness and tax compliance programmes for taxpayers involved in the digital economy by organising a series of engagements between LHDN’s senior management and celebrities and influencers.

“These informal engagement sessions aim to disseminate tax messages to social media influencers, which can then be directly conveyed to their followers on social media,” Abu Tariq said.

He said online transactions have become the focal point for tax evasion among individuals, reflecting the country’s changing economic trends and expanding digital landscape.

For those without a tax record, a notice will be sent to request that they report their income and file their taxes.

Any decision to charge a penalty for non-compliance to declare their taxes will be evaluated on a case-by-case basis, depending on why they failed to comply.

“Usually the income that they declare does not match the wealth they portray, so we have to investigate further to see if they have been under-reporting their income.

“There are a lot of tax evasion cases that we can identify from social media.

“It is more transparent than those who only do cash transactions,” he added