China warns internet platforms not to shift tax burden onto gig workers

China’s tax authorities have told internet platforms to avoid passing tax obligations onto gig workers, tightening industry oversight while stepping up a crackdown on tax-dodging internet influencers.\n“Platforms should not disguise additional fees during tax withholding and remittance processes, nor should they use such processes to shift tax obligations and increase gig workers’ burdens,” officials from the State Taxation Administration said at a press conference on Monday.\nAs regulation of the sector increases, the administration said gig workers – including food-delivery riders, ride-hailing drivers and housekeepers – would be exempt from tax reporting requirements, which are typically handled by platforms.\nThe administration added that it would step up supervision to ensure platforms do not offload their own tax liabilities onto gig workers.\nSince June, China has required e-commerce, short-video and social-media platforms to report income earned by their users, including merchants and influencers. More than 7,000 domestic and overseas companies have complied so far.\nAuthorities are also scrutinising the industry’s top earners. The State Taxation Administration said it has investigated 1,818 individuals with high income and assets – including celebrities and major influencers – recovering 1.52 billion yuan (US$215 million) in taxes this year.\nEnforcement ramped up in 2021, when Hangzhou authorities imposed a record 1.34 billion yuan fine on top e-commerce host Viya. By July this year, more than 360 tax evasion cases involving influencers had been uncovered, with over 3 billion yuan in taxes recuperated, the regulator said.\nRegulatory action has expanded beyond internet platforms. In the first eleven months of the year, authorities investigated 3,904 high-risk gas stations, recovering 4.16 billion yuan in unpaid taxes.\n\n\n\n\nMore than 1,100 entities, previously blacklisted for major tax violations, have restored their credit and been removed from the list – a 40 per cent year-on-year increase.\nIntensified enforcement came as many local governments face widening budget shortfalls amid a sharp decline in land-sale revenues, once a crucial source of income. With fiscal pressures mounting, Beijing has increasingly leaned on stronger tax compliance to stabilise public finances.\nElsewhere, regulators noted resilient business activity this year. The number of active enterprises in the first 10 months rose 9.8 per cent from a year earlier, increasing their share of all registered enterprises by 4.7 percentage points, according to the tax authority.\nChina’s expansion of visa-free entry policies has also boosted inbound tourism. In the first 11 months of the year, the number of overseas visitors claiming departure tax refunds soared 285 per cent year on year, with tax-refund sales and refunded amounts both rising nearly 99 per cent.\nBy the end of November, China had 12,252 tax-refund stores, including more than 7,000 offering instant “shop-and-refund” services, regulators said.\nSpending on consumer durables has also continued to strengthen. Between January and November, official data showed that sales revenue from mobile phones and communication devices grew by 20.3 per cent, while home appliance sales rose by 26.5 per cent. New-energy passenger vehicle sales climbed 19.1 per cent over the same period.\nCorporate investment also picked up, with invoice data showing equipment purchases grew 10.7 per cent in the first eleven months.\n