Huge penalty for tax evasion to act as a warning to other offenders
China’s top livestreamer Huang Wei, nicknamed Viya, was fined 1.34 billion yuan ($210 million) for dodging taxes by the taxation authority in Hangzhou, East China’s Zhejiang Province, the State Taxation Administration announced on Monday.
It is the largest fine ever imposed on a livestreamer, and market observers said that the case is a benchmark that will promote the healthy and sustainable development of the industry with stronger supervision, and it proves that no one can cross the legal line, no matter what industry they are in.
Viya evaded a total of 643 million yuan in taxes and 60 million yuan of other underpayments between 2019 and 2020 by concealing her personal income along with other false tax declarations, the statement read.
Viya was previously accused of serious tax violations, but she refused to fully correct her mistakes, and it was on this basis that the taxation authority in Hangzhou decided to conduct a comprehensive investigation, an official in charge of the case said on Monday.
As for whether Viya will be held criminally responsible, the official said that Viya will not be investigated for criminal responsibility if she pays the fine within the prescribed time limit, as this is the first time she’s been detected dodging taxes.
Last year, she sold a rocket launch service for 40 million yuan. Viya said on her official Weibo that she fully accepts the decision of the tax department in accordance with the law, and will actively raise funds to complete the payment within the specified time.
Viya was scheduled to conduct a livestreaming at 7 pm on Monday, focusing on cosmetics, but the live studio was no longer found in the Taobao app after the penalty was announced. Her official Sina Weibo account and Douyin account were banned later on Monday night as of 9:40 pm.
“Our operation is normal,” the Meione (Shanghai) Network Technology Co, partner of Li Jiaqi, another top livestreaming salesman widely known as the “lipstick brother” told the Global Times on Monday.
More than 1,000 livestreamers carried out their own internal audits and made their overdue tax payments, Chinanews.com reported on Monday.
Some internet anchors’ tax violations have disrupted the order of tax collection and management, and undermined market environment of fair competition, and taxation departments’ move is conducive to the long-term, standardized and healthy development of the platform economy, the Hangzhou taxation bureau said.
“The livestreaming industry will become a regulatory focus for the relevant authorities,” Hao Junbo, chief lawyer at the HAO Law Firm in Beijing, told the Global Times on Monday.
Hao said that livestreaming is a fast-rising industry with relatively high incomes, compared with other industries, but the supervision system was not able to fully catch up due to a lack of technological support.
With the development of relevant technology, the supervision of the industry will intensify.
The Chinese livestreaming sector has witnessed huge growth in recent years, and the pandemic has triggered a boom in livestreaming, which has also been a driving force for e-commerce in the country.
During the Double 11 shopping gala, the cumulative sales of Chinese livestreaming star Li Jiaqi reached 11.5 billion yuan, with estimated sales of 37.71 million yuan on October 20, the first day of this year’s Double 11 shopping festival.
Viya sold products worth 8.5 billion yuan in 14 hours.
Data from the Ministry of Commerce showed that in the first quarter of 2020, e-commerce live broadcasts exceeded 4 million.
The State Taxation Administration said in September that it will strengthen tax administration in the entertainment sector, including livestreaming.
Last month, two influential livestreamers — “XueliCherie” (real name Zhu Chenhui) and “Lin Shanshan_Sunny” (real name Lin Shanshan) were fined 65.55 million yuan and 27.67 million yuan, respectively, for dodging taxes, by the Hangzhou regulator.
The industry will be promoted in a healthy and sustainable way as more livestreamers who abide by the law will obtain more opportunities. Viya may have used the funds from the taxes she didn’t pay to expand and generate more traffic, competing with others in an unfair way, Zhang Yi, CEO of the iiMedia Research Institute, told the Global Times on Monday
As for how Viya’s case may affect the domestic platform economy, Zhang said that enhanced regulation will boost market confidence, since more livestreamers will see a growing potential for success, and users can have more diverse choices as to who they follow and where to make purchases.
The top internet celebrities are representatives of the super-high income group. They should stick to the bottom line of the law, actively assume social responsibilities, and become a model for paying taxes, and it is the right time for the taxation department to undertake such investigations, a Global Times commentary said.
Viya introduces products during a livestream show in April. Photos: VCG
