You follow them. They are the flawless men and women on social media, donning chic outfits and no‑makeup makeup, gazing at a cotton candy sky in a far‑away Tuscan resort. They execute pro‑quality photos with their VSCO fairy dust.

You love them. You, along with a thousand others, profess this on Instagram photos.

And boy has every double tap led to the birth of a new money‑making avenue.

Enter the so‑called “influencers”: ordinary people who have gained internet fame for sharing their life and who have cultivated a steady online following in channels such as, but not limited to, Instagram, Facebook, and their own web sites.

Influencers have the voice of an ordinary person and the reach of a celebrity. If you think that fetching thousands of likes is easy money—a product of a mere click on a camera plus a sneaky caption—you’re wrong. The London Evening Standard called the story a “wizardry” in its article about Steve Bartlett, CEO of an “influencer marketing agency” that turned over around £6 million last year and claims that they can make anything trend in 26 minutes.

For brands, this is a new sphere of commerce, and a more economical one at that. In a bid to establish credibility and intimate promotions on social media sites, companies have began to tap influencers to feed a brand’s message to their audience.

“Social media influencers are effective primarily as a reach channel,” Adi Timbol‑Hernandez, President of non‑stock, non‑profit organization called the Philippine Association of National Advertisers (PANA), told SparkUp in an email. “It allows brands to tap into an already established community of people with similar interests by using the voice of just one effective amplifier.”

Naturally, like every new thing, influencers have drawn some controversy. In the United States, the Federal Trade Commission (FTC) has instructed influencers to clearly disclose advertisements in a bid to crack down on “stealth marketing campaigns.” No rule is in place here in the Philippines, where there is no regulating body the equivalent of the FTC.

Art Erka Capili Inciong

With our without critics, influencers are here to stay. After all, they have a market, and one that finds them extremely valuable.

“We [at McDonald’s] have used social media influencers over the years—from popular showbiz celebrities with broad reach and appeal to targeted influencers of a specific interest set to fashion and food bloggers,” Ms. Timbol‑Hernandez, who aside from being PANA chief also does PR and communications for the local office for the world’s largest fastfood chain.

According to Ms. Hernandez, the use of social media influencers enables companies to “reach an established audience” and “present the products and services from a different point of view.” Influencers also serve as consultants, who give clients an idea about what they should offer to consumers as some influencers “have a deeper understanding of what clicks in the market.”

Compared to traditional means of advertising like television, radio, and print, influencer marketing, she said, is “more personal and authentic if done right.”

“They add more human voice to a brand,” she said. “Also, because they are on social media, influencers are able to invite more participation and direct engagement among the audience versus above the line media channels.”

The only downside she sees is the inability to control these influencers from doing something that “does not fit your brand or may seem not authentic.”

Ms. Hernandez added that using social media influencers also allows companies to reach the young generation—Gen Y and Gen Z alike—who often watch videos on YouTube than on television, get their news from Twitter than from broadsheets, and listen to online streaming services rather than the radio. “There is also something about generational influence,” she said. “Social media influencers, by the age of the medium, allows brands to tap into the younger generation—a generation that does not consume media through the traditional channels.”

Asked if there is a need for regulation similar to what the US’s FTC has put in place, Ms. Timbol‑Hernandez took a step back. “It should be called out if influencers are being paid to promote something,” she said. “Bigger picture though, I think netizens are very discerning. They can actually see when something isn’t authentic, so best bet is to really collaborate with influencers who aren’t just getting paid, but actually genuinely love your brand.”

“It is through self‑regulation that a balance is struck with protecting consumers while allowing brands to remain creative and innovative in their communications,” she added. Ms. Hernandez then pointed her finger at the Ad Standards Council, another non‑profit that promotes responsible advertising, which she says may act as a regulating body for influencers in the Philippines.

How do online stores begin to pay taxes?

That, Tax Management Association of the Philippines (TMAP) President Maria Lourdes Lim told SparkUp, is among the many problems faced by online businesses today. “If I were a small business, I wouldn’t have the capability to hire my own accountant who’ll have to do all the calculations for me to comply with my tax requirements,” said Ms. Lim, an online shopper herself. The compliance of small businesses, she says, should be different from that of bigger businesses. TMAP works with the Department of Finance (DoF) and the Bureau of Internal Revenue (BIR) in coming up with policies that would make it easier for people to pay taxes.

But for the part of the BIR, she admits: “they don’t have the manpower to monitor and ensure that all businesses are registered and complying with their tax requirements.”

Currently, she says, the government treats businesses going online as just “another mode of doing business”. The government currently treats Instagram shops that sell hard‑to‑find lip kits the same way as it would a sari‑sari store.

Yet the government recognizes the need to assist online businesses.

“We live in the digital age and the government needs to adapt to the times. We need to provide a platform for the new wave of startups and e‑commerce enterprises, in order that they may thrive while contributing to the country’s economic growth,” said Representative Dakila Cua (Quirino, lone district) in a mobile message to SparkUp. Mr. Cua is the chair of the House committee on ways & means, where all tax laws come from, and principal author of House Bill 4774 (HB 4774), a tax reform package based on the proposal of the DoF which would among other things lower personal income tax rates in a way that would exempt low income earners including fresh grads in entry‑level jobs, and increase the threshold for the VAT requirement for businesses.

The reform bill, if passed in its current version, would mean that online business owners won’t have to pay their taxes until their yearly earning hits ₱3 million, which gives them enough time to decide whether or not they need to rope in an accountant into the business. But that’s not all.

“We’re lobbying so that the threshold might possibly be raised to ₱5 million,” Ms. Lim said, which is based on the experience of TMAP and its members, all of them having tax as their area of expertise. “We and the government are doing the reform so that taxpayers would be encouraged to comply with their tax requirements. We’re also working with the BIR to simplify tax returns.”

All‑in‑all, the government is working with experts to make things easier for small online businesses to pay taxes and be responsible citizens in the Philippines.

“Some people say ‘the government’s just going to use our money for corruption’ as a reason to not pay their taxes. But that doesn’t justify it,” said Ms. Lim. Not to mention that tax evasion is illegal. The government needs money to operate, just like we need money to survive. “Paying taxes is not a right, but an obligation,” she added. “We all must do our part in nation building.”