Livestream. Photo: CFP

Authorities in Hangzhou, East China's Zhejiang Province on Monday slapped massive fines on two influential livestreamers, Zhu Chenhui and Lin Shanshan, for evading taxes, as the country has been tightening regulations on the online sector to ensure legal and sustainable development. 

Following investigations into the two livestreamers, Zhu, who is known as "XueliCherie," was ordered to pay 65.55 million yuan ($10.26 million) toward overdue taxes and penalties, while Lin, known as "Lin Shanshan_Sunny," will have to pay 27.67 million yuan.

It was found that Zhu and Lin evaded personal income tax by setting up sole proprietorships in different places in China in 2019 and 2020, and then recorded their personal salaries as the operating income of their enterprises, which violated the tax laws and disrupted the order of tax collection, according to an official notice.

Zhu and Lin on Monday evening posted apologies via their accounts on China's Twitter-like social media Sina Weibo, saying that they will suspend their livestreaming to enhance their compliance, including paying the required tax and taking more social responsibility.

According to livestreaming monitoring platform Huitun, Zhu ranked third on a livestreamer chart of Taobao, one of China's top e-commerce platforms, with over 33 million fans. Li Jiaqi and Wei Ya held the first and second places. Lin ranked sixth with over 10 million fans. 

Analysts suggested that the widespread media reports about some specific livestreamers' illicit acts showed the market supervisors' intention to further regulate the sector.

Liu Dingding, a Beijing-based independent analyst, told the Global Times on Monday that now is the right time to rectify the sector from "head to toe."

Liu pointed out other existing issues, including the sale of fake and defective items by livestreaming promoters, and cases of the infringement of consumers' rights, such as the controversy over the pricing policies of France-based beauty and cosmetics giant L'Oréal during past Double 11 online shopping festival.

"Some livestreamers have taken illicit approaches to win the competition by stigmatizing their rivals, which created an unfair environment," said Liu.

Officials from the Zhejiang tax office vowed to enhance regulation in the cultural and entertainment sector in line with relevant laws, in order to create a fair tax collection environment. 

Global Times