Beijing, China – As China grapples with an economic slowdown, local governments are intensifying their efforts to crack down on tax evasion, particularly among high-profile livestreaming influencers. The Chinese State Taxation Administration recently announced that it had imposed hefty fines on three influencers found guilty of tax evasion between 2020 and 2023.
According to a statement released by the administration on its official website, authorities in Sichuan province levied a fine of 14.31 million yuan ($2.76 million) on an internet celebrity who had evaded 8.05 million yuan ($1.55 million) in taxes. In Liaoning province, an individual was fined nearly double the amount of unpaid taxes, totaling 7.35 million yuan ($1.41 million). Additionally, a livestreaming host in Zhejiang province was fined 2.47 million yuan ($470,000) for tax violations.
The State Taxation Administration emphasized a "zero-tolerance" policy towards tax evasion and related misconduct while pledging to support the growth of various businesses. The administration highlighted that as public figures, online influencers have a legal obligation to fulfill their tax duties and set a positive example for their fans.
Peng Peng, executive chairman of the Guangdong Reform Association, suggested that local governments may intensify their crackdown on tax evasion due to the weakened economic momentum. He argued that economic downturns can lead to increased tax evasion by businesses, forcing local governments to seek additional revenue.
In 2021, the Hangzhou tax authorities imposed a record fine of 1.34 billion yuan ($260 million) on the popular e-commerce influencer Viya for tax evasion. This hefty penalty sparked public debate about the excessive earnings of livestreaming influencers and the fairness of their tax obligations.
Peng noted that taxation of internet influencers in China has been a gray area due to the lack of comprehensive tax laws addressing the complexities of emerging industries like livestreaming. However, he expressed concern that excessive penalties could harm business confidence and hinder economic recovery.
"Economic strengthening should remain the top priority for local governments," Peng said.
The crackdown on tax evasion among livestreaming influencers highlights the Chinese government's increasing efforts to regulate the country's burgeoning digital economy and ensure fair taxation practices.
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