Chinese tax authorities have hit live-stream shopping influencer Huang Wei, known to her fans as Viya, with an unprecedented 1.34 billion yuan (US$210 million) penalty for tax evasion and ordered her to refrain from rejoining social media.
Viya — heralded in China as the “queen of live streaming” — was ordered to pay the massive sum in back taxes, late fees and fines, the State Taxation Administration announced on its website on Dec. 20.
The regime claimed that Viya had avoided hundreds of millions of yuan in total taxes from 2019 to 2020 through a slew of tax evasion methods, including “hiding commission fees, declaring personal wages as corporate income, and omitting reports of taxable income.”
As of Dec. 20, Viya’s livestream link on Taobao, China’s largest online shopping platform, along with her Weibo account were inaccessible and appeared to have been removed. The 36-year-old from Anhui Province has over 80 million followers on Taobao and 18 million on Weibo, which is the Chinese equivalent of Twitter.
“This account is banned due to the violation of the platform agreement,” a statement on Viya’s Douyin read, China’s version of TikTok. A statement on her Weibo account simply said her page was “not available.”
On this year’s Singles’ Day, China’s largest online shopping festival, Viya and her team sold 8.5 billion yuan worth of commercial products over a 14-hour live-streaming session. The live-stream by Viya’s channel exceeded one full year’s worth of revenue at Wangfujing Group, one of China’s largest department store chains.
The Nov. 11 single-day bonanza, also known as Double 11, typically sees billions of dollars worth of online sales in China.
Rising tech crackdown
The fine is the largest penalty ever imposed on an influencer, according to state media Global Times. The penalty also sends a warning to other influencers that the Chinese Communist Party’s (CCP) campaign to target internet celebrities under the slogan of anti-corruption won’t be letting up anytime soon.
It is reported that China’s live streaming e-commerce market exceeded 1.2 trillion yuan in 2020, with an annual growth rate of 197 percent. By the end of 2020, China’s e-commerce-related enterprises had almost 9000 registered users, with the number of influencers in the industry reaching about 1.2 million.
In late November, two other popular influencers — Zhu Chenhui, known as Xueli Cherie online, and Lin Shanshan — were also fined approximately $90 million for tax evasion. The two have since disappeared from China’s tightly censored internet, with their social media accounts, Taobao stores and official company websites remaining inaccessible.
The largest fine for tax evasion prior to Huang’s $210 million was levied on actress Fan Bingbing in 2018. Fan and companies she was affiliated with were ordered to pay approximately 884 million yuan in back taxes and fines.
A tax official in Hangzhou familiar with Huang’s case said, “If she can pay the tax, late fee and fine within the prescribed time limit, she will not be investigated for criminal accountability,” the official added. “If she fails … the tax authority will transfer it to the police department for processing according to the law.”
The tax bureau said that Viya had cooperated with authorities’ initial investigations and said the online celebrity would not face any criminal charges as long as she pays the fine and continues to cooperate.
Viya and her husband, Dong Haifeng, published apology letters on his Weibo account after the fine was announced on Dec. 20. “I completely accept the punishment made by the tax department and will actively raise money to pay [the fine] on time,” she said.
Shares in China’s largest live-streaming and e-commerce operators took a plunge in the New York Stock Exchange following Huang’s penalty. Bilibili Inc. dove 11.6 percent, Alibaba Group Holding Ltd. fell by 5.8 percent and Joyy Inc. dipped 4.7 percent. Experts believe China’s tech sector will continue to see further profit declines as the country’s regulators continue to crackdown on online businesses and influencers.