China Continues Its Crackdown, Penalizes Social Media Influencer $16M For Tax Evasion

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  • China has penalized a social media influencer, Xu Guohao, for $16 million for tax evasion.
  • Guohao, who live streams on Hello Group Inc MOMO Momo, is liable for back taxes, late fees, and fines for evading tax from 2019 to 2020.
  • China looks to strengthen further tax supervision in the live streaming industry, Bloomberg reports.
  • China has ramped up enforcement of tax laws in the live streaming sector for the past year to support its common prosperity campaign. 
  • Streaming platforms are bound to collect income taxes and deliver reports, including the personal information of social media personalities, to local authorities every six months. 
  • The report noted popular live streamer Huang Wei disappeared from public view after being fined $210 million in December 2021.
  • Li Jiaqi, another top salesman, also abruptly disappeared from the internet, Bloomberg noted.
  • Chinese tech giants like Alibaba Group Holding Limited BABA and others explored overseas opportunities to counter the uncertainties associated with the country's domestic regulatory environment.
  • Interestingly, in a CNBC interviewJD.com, Inc JD Retail CEO Xin Lijun acknowledged that regulation is not necessarily easing, but it is becoming more stable.
  • "But as the regulation becomes more stable, the overall development of the internet sector and the market will be more stable," Lijun said.
  • JD.com remain unscathed by regulatory action, unlike Alibaba, which suffered a $2.8 billion antitrust fine in 2021.
  • Lijun addressed how the pandemic resurgence and China's Covid policy took a toll on the country's economic growth and affected Chinese consumers significantly ahead of its shopping extravaganza. Chinese tech workers are having difficulty landing jobs as the companies start downsizing their workforce.
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