Top livestreamer fined US$206 million for tax evasion

China's livestreamers have been told to strengthen their compliance efforts after a top broadcaster was penalized by the tax authorities.

On Monday, tax authorities from Zhejiang Province ordered Huang Wei, better known as Viya, to pay penalties and overdue taxes totaling 1.34 billion yuan (US$206 million).

Her livestreaming account on shopping site Taobao was banned on Monday night. Social media platform Weibo and video-sharing app Douyin also suspended her accounts.

Instead of paying taxes based on her personal commissions from livestreaming, she set up various business consulting entities as shell companies to evade taxes.

Huang is a top Taobao livestreamer focusing on apparel, food and beverage products, as well as daily groceries.

On the first day of the pre-sale kickoff for this year's Singles Day on October 20, Huang raked in 8.5 billion yuan in transactions on her livestreaming session on Taobao.

The tax evasion was linked to the period between 2019 and 2020. Huang offered to pay 500 million yuan after an investigation was opened against her.

Huang would not be subject to criminal charges if she would follow the administrative orders and pay the overdue tax on time, according to an official notice by the tax authorities.

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"Tax authorities' investigation and administrative penalties that target tax violations of livestreamers are conducive to the long-term standardized and healthy development of the platform economy," according to the notice issued on Monday.

The new platform economies have been instrumental in catering to shoppers' demand and boosting economic development but some livestreamers' law-breaking activities have disrupted a fair competing environment, it added.

Huang said in a statement on late Monday that she has fully disclosed her income structures and sources to the tax authorities and will fully abide by the administrative penalties.

She apologized for consumers who have put confidence in her and will take full responsibilities for the wrongdoings.

Weibo commentators thought otherwise and accused her of being greedy. A user with the nickname "Miss Tian" suggest her account should also be banned. Others questioned her motives for her charity deeds and her poverty alleviation programs.

Hangzhou tax authorities last month ordered livestreamers Cherie and Lin Shanshan administrative penalties and overdue tax payments totaling 94 million yuan.

Livestreamers Cherie and Lin Shanshan last month were ordered to pay administrative penalties and overdue tax payments totaling 94 million yuan.

Their Weibo, Douyin and other social media accounts as well as their Taobao storefronts have since been removed.

With nearly 19 million followers on China's Twitter-like Weibo, Huang attracts tens of millions of viewers on her Taobao livestreaming sessions with time-limited deep discounts of apparel, snacks, and personal care items.

Livestreamers like Justin Li and Viya Huang are the top-grossing sales on Alibaba's consumer shopping site Taobao, as many turned to livestreaming to learn about product specifics when offline shopping was largely restricted last year.

They have become influential and also play a key role for brands to promote their products to avid online shoppers and bargain hunters.