INDIA New Delhi launches ‘Influencer Tax’

With a tax provision that came into force on July 1, promotional gifts to the stars of the web will be subject to a withholding of 10% of their value. The Indian government intends to broaden the tax base of a rapidly growing market. 71% of young people say that they have already been guided by a social profile in the purchase of at least one product.

New Delhi () – On July 1, the “tax on influencers” came into force in India. According to the new provisions of the 2022 Finance Law, those who promote products on social networks will pay a 10% tax on the value of the benefits granted by companies or entities. The tax will be withheld at source. The benefits can be of any nature: cash, gift cards, gifts that exceed a value of 20,000 rupees (just under 250 euros ndr). The measure also applies to free drug samples given to hospitals and doctors. In all cases, the tax will not be applied if the products are returned.

The new provision of the Indian government aims to expand the tax base in the country, given the growing penetration of social networks and the increase in profits in the sector. According to an October 2020 survey by Rakuten Insight, almost 67% of those interviewed in India admitted to following at least one influencer on social media platforms, while only 12% said they did not know the meaning of the influencer. word. In the 25-34 age group, almost 71% of respondents admitted to having purchased a product sponsored by an influencer. In 2021, the influencer marketing sector in India was worth 9,000 million Indian rupees (nearly 110 million euros, ndr), but it is expected that in the next five years it will grow at a rate of 25%, reaching 22,000 crores in 2025.

Until now, this business had benefited not only the big stars of the web but also the micro-influencers, who could count on the simple exchange between the products received and the posts on their profiles on social networks. Now, with the introduction of taxation at source, industry experts believe that companies will be much more selective in choosing which partners to trust with their promotions.