Should a Web Blogger Be Taxed?
The answer is YES and NO. We could look at this from the angle
of the LAW and the angle of the determination based on what ‘mode’
of blogging is in perspective. The first question to ask is, are
some bloggers hobby bloggers or professional bloggers?
Empirically speaking, bloggers and freelancers and webmasters
and other people who offer specialized online services in different
genres may be considered owners of their businesses and/or people
who get paid for using their talent and or acquired skill.
Bloggers and webmasters usually earn income from advertising and
from selling their services. Other online professionals, such as
virtual assistants, social media strategists, SEO specialists,
content writers and website designers, usually earn income from
selling their services. In this case, bloggers may be considered as
self-employed individuals.
It is true that in Nigeria, the Federal Inland Revenue Service
(FIRS) is still battling with making e-commerce generally and
blogging a taxable means of earning income. There are lots of
issues trying to establish whether blogging is seen as a hobby or
as a professional means of doing business. But it is also important
to note that bloggers do native advertising of products and/or
services.
For example, on Linda Ikeji’s blog, a lot of advertising is done
for several companies ranging from small businesses to
multinational corporations that leverage on the traffic on her page
to promote their business concerns. On that count, it will not be
fair not to consider that a taxable income, since we have companies
whose revenue are stemmed from advertisements.
Further, freelance writers and online professionals may argue
that their services are immaterial and, therefore, cannot be taxed.
A blog can be seen as a publishing company of some sort, just like
a media house that owns print and electronic publishing platforms.
In that case, the argument for it being taxable carries the day.
Besides, there are offline strategic partnerships that ensue from
just promoting a business, from where a blogger earns big.
There is also the direct advertisement angle of blogging. This
is a complete taxable income and incurs some tax liability too.
So yes, bloggers are required to pay tax. But that isn’t all
there is to it. There are a few pertinent questions and clearances
that are critical to the understanding of this discourse.
Let’s get to the difference between a professional and a
bobby blogger:
The truth remains that blogging is a painstaking, sometimes
difficult venture that requires consistency, persistence, and hard
research as well as passion. A lot of people consider blogging to
be somewhat of a pastime, but there are levels when it crosses the
line and becomes full time and rewarding business. However, this
takes time and nurturing.
In the Companies Income Tax Act, Section 9:
PART II
The imposition of tax and profits chargeable
Charge of tax
(1) Subject to the provisions of this Act, the tax shall, for each
year of assessment, be payable at the rate specified in subsection
(1) of section 40 of this Act upon the profits of any company
accruing in, derived from, brought into, or received in, Nigeria in
respect of‐
(a) any trade or business for whatever period of time such trade
or business may have been carried on;
(b) rent or any premium arising from a right granted to any
other person for the use or occupation of any property; and where
any payment on account of such a rent as is mentioned in this
paragraph is made before the expiration of the period to which it
relates and is included for the purposes of this paragraph in the
profits of a company, then, so much of the payment as relates to
any period beginning with the date on which the payment is made
shall be treated for these purposes as accruing to the company
proportionately from day to day over the last‐mentioned period or
over the five years beginning with that date, whichever is the
shorter;
(c) dividends, interests, royalties, discounts, charges or
annuities;
(d) any source of annual profits or gains not falling within the
preceding categories;
(e) any amount deemed to be income or profit under a provision
of this Act or, with respect to any benefit arising from a pension
or provident fund, of the Personal Income Tax Act;
(f) fees, dues and allowances (wherever paid) for services
rendered;
While this may seem confusing to a lot of bloggers out there,
simply put this explanation this way, income tax will be levied on
any form of trade or business for as long as the business has been
carried on over the years.
Therefore, it is important to ascertain whether business
transactions are being made, services are being provided, direct
advertisements are being done from a blogging platform. This can be
used to address the issue of whether a blogger is a hobby blogger
or a professional blogger cum business owner.
The following characterization helps to draw the line, however
fine, between blogging for fun and making money out of it:
Hobby bloggers do it mainly for fun and leisure, not necessarily
for the money. However, money can also come in through Google
Adsense and Affiliate Marketing, but it will be limited. On the
other hand, business bloggers want to make money through their
blogs.
Hobby bloggers may or may not have a specific area of
specialization when it comes to topics, but professional bloggers
usually focus on niches where they feel more comfortable to blog
about, like lifestyle, sport, health, entertainment, politics,
etc.