China to crack down on tax evasion in livestreaming industry

China’s tax regulator said on Wednesday that it will crack down on tax evasion in its booming livestreaming industry, and will start requiring online platforms to report livestreamers’ identities, income and profits every six months.

The State Taxation Administration said on its website that livestreamers and platforms should compete fairly and fulfil their legal obligations to pay taxes.

“Livestreaming has played an important role in recent years in promoting flexible employment,” it said.

“At the same time, there are problems such as poor management by livestreaming platforms, irregular commercial marketing behaviour, tax evasion, which impede the industry’s healthy development and damage social fairness and justice.”

Livestreaming has surged in popularity in China, with millions of influencers running channels such as of Douyin, the Chinese equivalent of TikTok, Kuaishou (1024.HK) and other short video platforms, where they talk about topics including lifestyle, food, games and travel.

Chinese regulators have already targeted some of these personalities for tax evasion, in particular a few who sell products via livestream.

Internet celebrity Viya, whose real name is Huang Wei and was known China for her sales prowess, was fined 1.34 billion yuan ($211.1 million) last December for hiding personal income and other offences in 2019 and 2020.

China’s cyberspace watchdog also warned earlier this month that it will target companies that manage social media influencers for rectifications this year.

The Wall Street Journal reported on Tuesday that Chinese authorities are working on regulations to cap internet users’ daily monetary spending on digital tipping. Reuters