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China fines livestream influencers for evading tax with help of ad execs

The punishment of the influencers is part of Beijing’s larger efforts to crack down on the country’s big tech

The city of Hangzhou in China, home of e-commerce giant Alibaba, has fined two livestream influencers for evading taxes after they declared personal wages as income for sole proprietorships.

Zhu Chenhui, also known as Xueli Cherie online, and Lin Shanshan were fined 65.5m yuan ($13.9m) and 27.7m yuan respectively by the Zhejiang Provincial Tax Service, under the State Taxation Administration.

Under Chinese law, some high earners face higher tax rates than companies.

Zhu, who has more than 15 million followers on the microblogging platform Weibo, was accused of converting 84.4m yuan in personal wages and labor remuneration into income for multiple sole proprietorships that she set up in 2019 and 2020, allowing her to evade 30.4m yuan in taxes.

The Zhejiang Provincial Tax Service said it uncovered the crimes using big data analysis. It is also investigating ad strategist Li Zhiqiang for helping plan and execute the tax evasion, and said each influencer was ordered to pay twice the amount of unpaid taxes in addition to other fines.

“The tax services have also found through big data that other influencers may have evaded taxes, and these individual cases are being investigated currently,” said the tax service.

The punishment of the influencers is part of Beijing’s larger efforts to crack down on the country’s big tech, with a national campaign aimed at what it perceived as major issues in the digital industry.

The six-month-long campaign to address the ‘tough problems’ of the internet industry – including disturbing market order, infringing users’ rights, threatening data security and unauthorized internet connections – resulted in the creation of China’s new personal data law, The Personal Information Protection Law (PIPL), which came into effect on November 1.

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