The advent of technology amidst the pandemic initiated the rise of live-streaming as a new profession and business for anyone. Many fans watch well-known streamers vanishing from the internet because of tax concerns.
New Live-streamer in China Punished With a Hefty $970,300 Fine For Tax Violations
Fan Sifeng, a Chinese livestreamer and influencer, was fined 6.5 million yuan (US$970,300) for tax payment violations as part of China's ongoing tax crackdown on the nation's once-thriving live-streaming business.
According to a statement issued on Thursday, June 30, by the tax authority of Xiamen, a city in southeast Fujian province, live-streamer Fan Sifeng was ordered to pay the back taxes, late fees, and fines after he failed to report his full income to tax authorities, avoiding more than 2.6 million yuan in taxes between July 2017 and December 2021.
Cases of Past Tax Evasion Issues of Live-Streamers
In the past year, the live-streaming e-commerce sector has changed drastically as a result of increased scrutiny. Some of the greatest names in the industry have vanished from online platforms after engaging in tax-related scandals.
Li Jiaqi, known in English as Austin Li, is a Chinese streamer, social media influencer, and entrepreneur focusing on beauty and cosmetics. He is dubbed the "lipstick king" for once selling 15,000 tubes of lipstick in five minutes, vanished from the internet more recently after a commotion surrounding ice cream that some claimed had the shape of a tank. The night before June 4, the anniversary of the Tiananmen Square crackdown in 1989, the live stream was interrupted.
Since receiving a 1.3 billion yuan penalty for tax evasion in December, Huang Wei, also known professionally as Viya, has not been seen online. Her prowess at selling items, including many high-priced ones, has gained her the moniker "queen of live streaming." This happened not long after Zhu Chenhui, formerly among the top three live-streamers in China on Taobao Live from Alibaba Group Holding, was also penalized millions of yuan for tax cheating.
Chinese Laws Regarding Taxes
Since taxes in the live-streaming sector have long been a contentious topic, a new regulation requiring platforms to deduct personal income tax from live-streamers revenues was announced in March. This requirement could result in substantially higher tax liabilities for streaming hosts.
Beijing also released new live-streaming regulations this week that increase the requirements for who is qualified to show videos in a sector formerly renowned for its "low threshold and high income." Platforms are now required to screen influencers in professions like law and medicine.
Live-streaming is "not a job that you can do just by preparing some equipment and jokes. Some live-streamers who sell products online have accidentally brought trouble on themselves," according to a People's Daily article.
These incidents prompted a set of regulations that enforce the rule that live-streamers should ensure that they publish their online revenue honestly while also meeting tax responsibilities. Also, according to the same guidelines from the Beijing government, prominent online personalities who have broken the law or acted unethically must be barred from openly communicating their thoughts, holding public undertakings, opening a new account, or switching to another platform.
