In the recent past, some top-notch livestreamers have been making fat incomes from their e-commerce but paying little tax. Now the loopholes are being plugged.

China's two top-notch livestreamers, Zhu Chenhui and Lin Shanshan, will have to pay 65.55 million yuan ($10.27 million) and 27.67 million yuan respectively in unpaid taxes, overdue fees and fines, the Hangzhou tax authorities said on Monday. Hangzhou, the capital of Zhejiang province, is famed for e-commerce.

Between 2019 and 2020, the two internet celebrities were found to have set up sole proprietorship enterprises in different provinces and "laundered” their salaries and incomes into the gains of these sole proprietorship enterprises, which enjoyed lower tax rates.

Every citizen should obey tax laws and regulations, and the e-commerce industry cannot end up becoming a "gray area”. The penalty for the two livestreamers isn't aimed at hitting the platform economy, but at ensuring the healthy and sustainable development of the e-commerce industry by plugging the tax evasion loopholes.

In recent years, the e-commerce industry is growing rapidly in China, but the expanded business and increased sales, the complicated labor relationship and profit models in the livestreaming industry have brought challenges for the supervisors.

On the one hand, the related departments should cooperate to guide practitioners in the industry to raise their awareness to obey the tax laws and shoulder their social responsibilities while gaining the benefits brought by the platform economy. On the other hand, the authorities need to introduce more techniques to address the problem of tax evasion and accelerate the digital transformation on taxation.

In August, Chinese actress Zheng Shuang was fined 299 million yuan for tax evasion. Her former agent was fined 32.27 million yuan for helping Zheng evade her tax obligations and covering up her film remuneration, according to the local tax authority of Shanghai.

The State Taxation Administration said in September that the authorities will conduct regular inspections and guide the firms owned by entertainment celebrities and livestreaming stars to report incomes or profits and declare their incomes in accordance with the law. Apparently, in recent years, some celebrities have been setting up personal workshops to evade taxes, and the administration is determined to plus such loopholes.

Livestreaming rooms shouldn't end up being tax havens.