I recently read an article form Slashdot about Canada’s move to tighten their internet regulations and implement additional rules on taxation, and even user-generated content.

I then thought what if something similar happened to the Philippines. A valid question that comes to my mind is: Should there be a “Blogging Tax” levied on Bloggers?

My short answer to that is “No, not now”

The way I see it, Blogging, at least in the Philippines, is considered an “informal economy.” What that means is that Bloggers’ earnings are not currently regulated and monitored by social and legal institutions. That means institutions like the Bureau of Internal Revenue (BIR) opt not to touch your Adsense payments because it’s a wide open field and it’s a fied that the government doesn’t fully understand. (Why am I not surprised?)

To better illustrate the informal economy, Imagine you asked your neighbor to water your plants or sort your collection of DVD’s with the agreement that you will pay him/her later. After he/she finishes the task, you pay him/her with the agreed amount. Technically, your neighbor earned some income, thus may be subject to tax. However, since there’s really now strict regulations on “plant watering” or “DVD sorting,” your neighbor can avoid declaring his/her revenues and go home scott-free. You could say the same about the bribes and grease money.

Another thing is the transaction cost of implementing the sanctions on “tax avoidance” bloggers. There are thousands (and that number is growing) of bloggers in the Philippines and I’m assuming a good portion puts advertising in the blogs and a few have paid reviews or posts. If the BIR wants to monitor everyone’s actions and avoidance of the taxes from blogging revenue, it has to invest a lot in infrastructure and labor.

So if not now, when should the Blogging Tax be implemented? I say, once the blogging industry has matured and become institutionalized. (Like issuances of “Blogging Licenses” or requirement to register blogs and blog earnings by law).

Will those things happen? Not anytime soon.