It turns out that so-called ‘influencers,’ who have an influence on social media, are making profits through online transactions, but they are not being properly taxed.
According to data on the social media market business income tax submitted by the National Tax Service on the 2nd by Yang Ki Dae, a member of the Democratic Party of Korea, there were 785 influencers who reported their income in 2020, and their total income was 14.148 billion KRW (10.8 million USD) or around 13,800 USD for each influencer.
The SNS market, where influencers make money from advertising fees or product sales, is so active that one out of two Internet users (Seoul City Survey) responded that they have shopped after encountering an influencer’s post on social media.
As of 2019, the distribution industry estimates the size of the Korean SNS market to be about 20 trillion KRW (15.2 Billion USD). In particular, in the case of Korea, it is pointed out that there is an urgent need to improve the taxation system for influencers based on Instagram, which has a large number of users.
According to data from Knox Influencer, an SNS data analysis company, there are 90,189 Korean Instagram influencers with more than 10,000 followers, and there are 463 influencers with more than 1 million followers.
Revenue varies depending on the number of followers, but according to the influencer analysis company Hype Auditor, the average monthly income of global Instagram influencers is 19.6 million KRW (~15,000 USD) if they have more than 1 million followers.
In addition, if they have 500,000 to 1 million followers, they earn on average of 7.6 million KRW (~5,780 USD) per month. If they have 50,000 to 500,000 followers, they earn 4.57 million KRW (~3,476 USD); if they have 10,000 to 50,000 followers, they make 2.68 million KRW (~2,038 USD), and if they have 10 to 10,000, they earn on average of 1.85 million KRW (~1,407 USD), respectively.
Although there are more than 90,000 Instagram influencers in South Korea with over 10,000 followers, the National Tax Service first assigned an industry code and started taxation only in 2019. Tax data investigations on SNS influencers are also not being managed.
Congressman Yang Ki Dae “The system is not keeping up with the pace of the market. A fair taxation system for new industries must be created, which will help not only the national tax service but also the development of the industry.”
