China slapped an unprecedented $210 million fine on a top livestreamer for tax evasion, stepping up President Xi Jinping’s crackdown on online influencers who have grown wildly popular in recent years.
Huang Wei — also known as Viya — was ordered to pay 1.34 billion yuan in back taxes, late fees and fines, the State Taxation Administration said Monday in a statement on its website. According to the statement, she avoided tax totalling 643 millions yuan through concealing her personal income and falsely declaring in 2019 and 2020.
Shares in China’s largest livestreaming operators and services plunged in New York, with Bilibili Inc. diving 11.6%, Alibaba Group Holding Ltd. falling 5.8% and Joyy Inc. sliding 4.7%.
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Huang issued an apology just after the punishment was announced, saying on her Twitter-like Weibo account that she felt “deeply guilty.” “I totally accept the decision of the tax regulator and will actively collect funds to pay the fines within the deadline,” she wrote.
Viya’s representatives did not immediately respond to a request for comment.
Viya and her fellow online salespeople are facing the largest fine yet. Each night, they try to get shoppers to spend thousands of dollars on products like clothing, appliances, and cosmetics. The influencer is one of the biggest stars on Alibaba’s Taobao marketplace, drawing traffic and driving consumption.
The official Xinhua News Agency reported Tuesday that government departments must better coordinate their efforts in order to control the livestreaming market and reduce tax evasion.
According to the report, Huang was suspected of tax evasion by Hangzhou’s tax bureau.
The episode signals Beijing is turning its attention to the online streaming commerce arena, which has thrived with little regulation in recent years, as part of Xi’s common prosperity drive to share the wealth. The high-profile case may spook merchants and brands who rely on the format to drive sales, not just at Alibaba but across a number of its rivals’ platforms.
The tax authorities issued tougher guidelines in September for celebrities and livestreamers. Last month, two salespeople were each fined $15 million for income taxes evasion. Both the pages on Taobao for Zhu Chenhui, Lin Shanshan and Weibo are now blank.
Livestreaming is part variety show, part infomercial and part group chat — a format pioneered in China that has grown more popular since the pandemic started. The research company iiMedia estimates that livestreaming sales will reach over 1.2 trillion yuan, an increase of just 19 billion yuan for 2017.
According to 36kr.com, Viya’s total sales in 2020 exceeded 31 billion Yuan, which is the highest among her peers.
Her fine is bigger than the one levied on actress Fan Bingbing in 2018, which marked the start of the government’s campaign to rein in the entertainment industry. She and her companies were required to pay back taxes and penalties of 884 millions yuan.
Fan was largely exiled from the entertainment world since her punishment. Such high-profile rebukes from the central government usually spell the end of a celebrity’s career.
“Everyone is equal before the law, there is no ‘superstar’ or ‘rich and powerful,’ no one can despise the law and hope to be lucky,” the official Xinhua News Agency said in a commentary about Fan.
–With assistance from Yujing Liu.
