Tax offenses
Influencer in China has to pay 186 million euros
The Chinese “livestream queen” Huang Wei has to pay the equivalent of 186 million euros for tax offenses. Photo: Chan Yu / Imaginechina / dpa
© dpa-infocom GmbH
Influencers generate billions in sales in China’s Internet. In the campaign against show business, the tax authorities are now meeting the stars of the industry. High penalties serve as a deterrent.
China’s “Livestream Queen” Huang Wei has to pay the equivalent of 186 million euros for tax offenses.
The drastic penalty for the influencer, who advertises products under the name Viya on the Internet, should trigger “shock waves” in the online shopping industry, as it was said in comments on Tuesday. The communist party organ “People’s Daily” spoke of a “warning” for other famous personalities in the e-commerce business that “their websites are not outside the law”.
The 35-year-old has evaded 643 million yuan in taxes by withholding income or incorrectly declaring income for over two years, the tax office in Hangzhou said. The headquarters of the online giant Alibaba, which operates the Taobao trading platform with 500 million registered users, is located in the east Chinese city, on which Huang Weis’ live stream can be followed. The tax authorities announced that they would also want to take action against tax offenses by other celebrities in the online industry.
Record amount for a livestream star
Huang Wei’s tax fines and back payments totaling 1.34 billion yuan are the highest ever for a livestream star. The amount also exceeds the 884 million yuan (122 million euros today) that the famous actress Fan Bingbing had to pay to the tax authorities in 2018. In a similar case, actress Zheng Shuang was forced to surrender 299 yuan million (US $ 41 million) to the tax authorities at the end of August for tax offenses.
The procedure is part of a “cleanup campaign” against celebrities and show business in China. 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.
With tens of millions of followers on social media, Huang Wei is the star of the influencer community as she can mobilize up to ten million viewers for one of her online advertising shows. According to estimates by industry experts, it should have generated more than 31 billion yuan (€ 4.3 billion) in sales in 2020 – more than any other Internet size. Up to now, the modern business fields had been able to develop without much attention from the supervisory authorities.
Sorry to Weibo
“This incident should alarm everyone that he has to pay a high price if he challenges the law and evades taxes,” commented the “People’s Daily”. Huang Wei and her husband Dong Haifeng accepted the sentence and apologized to their fans in a message on the short message service Weibo: “We made a big mistake.”
With the pandemic, the livestream industry in China has gained additional momentum. This year, according to estimates by market researchers, sales will reach 1.2 trillion yuan – four years ago it was only 19 billion yuan.
On the first day of China’s famous Singles Day Shopping Festival on October 20, Huang Wei and her team sold goods like this for 8.5 billion yuan in a 14-hour livestream alone “South China Morning Post” reported. That corresponds to the sales of one of the largest Chinese department store chains, the Wangfujing Group, for the entire past year.