On Tuesday, the country’s major livestreaming and e-commerce platforms fell after authorities imposed an unprecedented tax evasion fine on Viya. The government’s decision had a negative impact on tech stocks.
Kuaishou Technology dropped 3.9%. Chinese tech giant Alibaba Group Holding Ltd. fell 2.2%, and Bilibili Inc. declined 8.8% in Hong Kong. One day earlier, stocks fell in New York, where Alibaba declined 5.8%, Bilibili dropped 11.6%, and Joyy Inc. fell 4.7%.
This week, the State Taxation Administration ordered Huang Wei, also known as Viya, to pay 1.34 billion yuan ($210 million) in back taxes, late fees, and fines. This morning, Viya’s accounts disappeared across platforms like Weibo to Alibaba’s Taobao.
Tech stocks and authorities
As mentioned earlier, tech stocks declined on Tuesday morning.
Viya’s fine shows that China is ready to take measures against anyone who breaks the law. The country’s leader Xi Jinping promised to clamp down on illegal sources of income as part of his “common prosperity” drive to close the wealth gap.
There may continue to be more fines as well as other restrictions on livestreaming in particular and the tech sector as a whole. Authorities are closely monitoring online influencers.
Several months ago, officials announced more rigid rules applying to celebrities as well as livestreamers. Since September, more than 1,000 livestreamers and workers in other new industries voluntarily paid back taxes. Viya was not among them. In 2020, she had total sales of more than 31 billion yuan, the most among her peers across livestreaming platforms.
The Tax Bureau in the city of Hangzhou suspected Huang Wei had evaded taxes. Huang Wei also failed to rectify the situation after repeated reminders from authorities. She avoided taxes by concealing her commission income and falsely declaring it according to the taxation administration.
COMMENTS