Viya introduces products during a livestream show. Photos: VCG

Local taxation authorities across China including Beijing, Shanghai, Zhejiang, Jiangsu and Guangdong have asked celebrities and livestreamers to assess their tax declarations, and report their business irregularity, such as tax dodging, to local authorities, by the end of 2021 if they want to receive leniency on penalties, in the wake of the $210 million fine imposed on renowned Chinese livestreamer Viya.

Analysts stressed that with strengthened taxation supervision, the sector will develop in a healthy and sustainable way, especially as legal supervision of the internet industry is being enhanced.

According to announcements by a number of taxation bureaus, pop stars and livestreamers who have not yet addressed their tax-related problems or have not assessed their own potential tax liabilities should do so in accordance with the law and the requirements detailed in the relevant notice. 

"Livestreamers and relevant agencies should reflect on themselves, and change their mindset from pursuing rapid development to prioritizing compliance with law and regulations," Liu Dingding, a Beijing-based independent analyst, told the Global Times on Wednesday. 

For those who report and correct tax-related problems by the end of 2021, the authorities will reduce, mitigate or even waive tax penalties. Those who don't come forward voluntarily will face severe action. 

However, Liu said that livestreamers may lose their cost advantages if they have to pay overdue taxes, adding that the development of the industry may slow but it will not significantly affect the development of the entire e-commerce industry.

Zhang Yi, CEO of the iiMedia Research Institute, told the Global Times on Wednesday that livestreamers with different income levels may be affected to various degrees, as the tax paid by individuals will be divided proportionally. 

China's top livestreamer Huang Wei, or Viya, was fined 1.34 billion yuan ($210 million) for dodging taxes by the taxation authority in Hangzhou, East China's Zhejiang Province, the State Taxation Administration announced on Monday.

The Ministry of Human Resources and Social Security, Cyberspace Administration of China and China's National Radio and Television Administration in early December jointly released a national skill standard for livestreamers selling goods, asking them to guarantee product quality. 

As of the end of 2020, there were more than 130 million livestreaming accounts in China, which have more than 617 million users, according to an industry report.

Chinese pop star Zhang Yixing, who is also known as LayZhang, was announced as a promotion ambassador of the Hunan Taxation Bureau on Wednesday. "I will witness the new services of taxation," Zhang wrote.

Global Times