China’s Tax Agency Cracks Down on Influencers

A newly proposed regulation would require internet platform operators to report revenue information about users

China’s tax authority on Friday published a draft regulation that would require the operators of e-commerce, short-video and social media platforms to report the income of merchants and influencers.

Under the current draft, which is soliciting public feedback until January 19, internet platform operators must report the identity, income and other tax-related information about revenue-generating users to the authority on a quarterly basis, the State Taxation Administration (STA) said in a statement on Friday.

The STA is looking to tighten its oversight of online sellers at a time when the country’s tax revenues have slowed significantly. National tax revenue fell 3.9 per cent this year through November compared with the same period last year.

Among other information that would have to be turned over upon request under the regulation, which was co-authored by State Administration for Market Regulation, are total revenue, refund amounts, advertising income, and bank account numbers.

The regulation, introduced as an expansion of the 2019 E-Commerce Law, is designed to crack down on tax evasion, as it is difficult for the STA to track the actual income of online influencers and merchants.

At the same time, the measure could add new burdens to people who make their living on China’s largest internet platforms, including Tmall and Taobao owned by Alibaba Group Holding, Douyin from TikTok owner ByteDance, as well as the eponymous short-video platform from Kuaishou Technology. Alibaba owns the South China Morning Post.