Busted! Famous Livestreamers Fined Millions of Dollars for Tax Evasion

Tax authorities in China’s eastern Zhejiang province announced on November 22 that popular livestreamers Zhu Chenhui (known as Xueli Cherie) and Lin Shanshan had been fined 65.5 million RMB (10.3 million USD) and 27.7 million RMB (4.3 million USD), respectively, for tax evasion.

According to the official statement by Zhejiang Provincial Tax Service, the two influencers evaded income tax by filing their personal earnings as the income of companies they’d fabricated.

Following the announcement, the hashtag ‘Xueli and Lin Shanshan were penalized for tax evasion’ (#雪梨和林珊珊偷逃税被处罚#) was trending on Weibo, accumulating more than 940 million views at the time of writing.

Lin Shanshan in a promotional poster for a Tmall livestreaming event. Image via Weibo

Zhu and Lin later issued apology letters on Weibo, a popular Chinese microblogging platform, where they have more than 15 million and 9 million followers, respectively.

They cited their ignorance of the Chinese tax code and vowed to fulfill their tax duties in the future. The apology letters, however, did not earn Chinese netizens’ forgiveness.

“It is ridiculous that Xueli used ‘lack of tax code knowledge’ as an excuse. She has been in the industry for more than 10 years,” wrote an unconvinced netizen.

Another user shared, “It’s more like they understood the tax code so well [that they could evade tax], as opposed to not understanding the tax code.”

Zhu (Xueli) attending a commercial livestreaming event. Image via Weibo

The move indicates that the Chinese government is increasing efforts to regulate the nation’s lucrative livestreaming industry, which has an estimated market value of more than 66 billion USD.

Amid the ongoing Covid-19 pandemic, buying products from livestreaming influencers has become one of the most popular ways for Chinese internet users to shop.

Meanwhile, livestreaming has become a platform for people to launch their careers as influencers and salespeople. For example, livestreamers Li Jiaqi and Viya became famous for their ability to sell products ranging from lipstick to rockets (seriously, Kuaizhou-1A solid-fuel carrier rockets).

The livestreaming industry is apparently also an attractive option for those thinking of a career change: Yu Minhong, the founder of Chinese tutoring giant New Oriental Education & Technology, recently announced that his company would begin selling vegetables via livestream after a national crackdown on for-profit tutoring institutions.

Cover image via Weibo