Tax evasion: Record fine for China’s livestream queen

As China’s top influencer, Huang Wei makes gigantic sales. Now she has been sentenced to a record fine of 186 million euros – she is said to have concealed income. The regulators want to target more Internet stars.

China’s livestream queen Huang Wei has to pay the equivalent of 186 million euros for tax offenses. The fine at this level is the highest that the Chinese authorities have ever imposed on an Internet star.

Huang Wei has already accepted the sentence. In a message in the short message service Weibo, she apologized to her fans: “We made a big mistake.” She feels guilty and will try to pay the sum by the deadline set.

The mid-30-year-old is one of the most famous influencers in China. Not only does it have millions of fans on social media, but it can also mobilize up to ten million viewers on its online advertising shows. Industry experts estimate that it generated sales of 4.3 billion euros in 2020 alone – more than any other Internet giant.

Authority: evaded 90 million euros

So far, this market has developed without the intervention of China’s regulatory authorities. In the case of Huang Wei, the allegations were grave. The tax office in Hangzhou announced that the young woman had evaded taxes equivalent to almost 90 million euros by hiding income from the tax office. She also let deadlines pass by which she should correct her tax return.

The tax authorities announced that they would also want to take action against tax offenses by other celebrities in the online industry. The amount of the fine that Huang Wei now has to pay surpasses any previous one. In 2018, the famous actress Fan Bingbing had to surrender 122 million euros to the tax authorities.

Commercial streaming is coming into focus

The approach of the authorities fits into the picture: After the state has recently increasingly imposed conditions and cartel penalties on large Chinese Internet companies, commercial streaming could now come into focus.

The rampant hype about the extremely well-paid stars and their enthusiastic fan communities is a thorn in the side of the communist leadership. In the increasing ideologization under China’s head of state and party leader Xi Jinping, who is pursuing the “great renewal of the Chinese nation”, the party is increasing its grip on the Internet, show business and culture.

“Warning to other personalities”

The drastic punishment against the influencer is likely to trigger “shock waves” in the online shopping industry, according to the comments of the major media. The communist party organ “People’s Newspaper” spoke of a “warning” for other famous figures in the e-commerce business. “This incident should alert everyone that challenging the law and evading taxes will mean paying a heavy price.”

With information from Benjamin Eyssel, ARD-Studio Beijing