Tax Bomb on Influencers to Solve Water Shortage... "Set an Example as Public Figures" Fines Imposed in China

Local Governments Enforce 'Zero Tolerance' Crackdown to Address Tax Revenue Shortfall
"Influencer Taxation in China Has Been Unclear for a Long Time"

As local governments in China face reduced tax revenues due to the economic downturn, they have intensified crackdowns on tax evasion by popular streamers.

On the 16th, the Hong Kong South China Morning Post (SCMP) reported that the State Taxation Administration of China announced three cases of tax evasion related to live streaming influencers from 2020 to 2023 on its official website on the 15th, imposing heavy fines, according to a statement.

According to the Taxation Administration, Sichuan Province in southwestern China imposed a fine of 14.31 million yuan (approximately 2.76 billion KRW) on an internet influencer for evading 8.05 million yuan (about 1.55 billion KRW) in taxes.

In Liaoning Province in the northeast, an individual who failed to pay 7.35 million yuan (about 1.417 billion KRW) in taxes was fined nearly double that amount. Additionally, in Zhejiang Province in the east, a live streaming host was fined 2.47 million yuan (about 470 million KRW) for tax evasion.

Famous Chinese beauty influencer Pan Yuren made headlines for paying taxes amounting to 100 million yuan (approximately 18.5 billion KRW) last March. [Image source= SNS capture]

The country's top tax regulatory agency maintains a zero-tolerance policy toward tax avoidance and related misconduct, while pledging to support the growth of various businesses.

Pengpeng, Executive Chairman of the Guangdong Reform Association, stated, “Weak economic momentum can lead to corporate tax evasion, and local governments also need to address tax revenue shortfalls,” adding that local governments may continue to strengthen crackdowns on tax evasion.

He further pointed out, “Taxation of internet influencers in China has long been a gray area,” noting that “there is no comprehensive tax law in China for new industries such as live streaming.”

Previously, in 2021, the Hangzhou Tax Bureau imposed a record fine of 1.34 billion yuan (260 billion KRW) on major e-commerce influencer Viya for tax evasion. This sparked increased criticism regarding the excessively high incomes and unequal distribution within the live streaming industry.

The administration emphasized, “Online live streaming influencers, as public figures, have an obligation to fulfill their tax responsibilities and set a positive example for their fans.”

However, Pengpeng expressed hope that “such harsh punishments will not lead to a vicious cycle that undermines corporate trust.”