Sima Nan responds to tax evasion accusations, criticized for “betraying friends” – Business relations revealed

After being blocked across the entire internet for several months, the Chinese Communist Party’s “Big Five Mao” Sima Nan’s case of tax evasion and subsequent hefty fine of nearly ten million yuan has been officially disclosed by authorities. Sima Nan responded to the tax evasion and fine by admitting guilt, stating that he had “lowered his head to confess,” but his apology was criticized for seemingly betraying his circle of friends.

It has been pointed out by some mainland media that Sima Nan often attacked private entrepreneurs, and his downfall serves as a turning point. Furthermore, media revealed Sima Nan’s business empire centered around internet traffic. Commentators believe that following this incident, Sima Nan’s carefully crafted public image has completely collapsed.

According to CCTV reports, on March 21, Beijing Municipal Taxation Bureau’s Inspection Department of the State Administration of Taxation in China made public the handling of Sima Nan’s tax evasion case.

Official reports stated that Internet influencer Sima Nan, from 2019 to 2023, evaded personal income tax and value-added tax through concealing income and false reporting, amounting to a total of 4.6243 million yuan. In addition, his controlled company, a film and television planning center in Beijing, avoided paying 753,200 yuan in corporate income tax.

The Beijing tax authorities demanded Sima Nan and his controlled company to pay back taxes, as well as late fees and fines, totaling 9.2694 million yuan.

On the same day, Phoenix Online published a commentary titled “Sima Nan’s Tax Evasion Investigation: Symbolic Significance.” The article mentioned that there has always been a saying online that if you want to observe the private economy, you can consider Sima Nan as a barometer.

The article also pointed out that for a long time, Sima Nan played the role of an “anti-American warrior” online, often attacking private entrepreneurs. These attacks on entrepreneurs even led to accusations of damaging their reputations and affecting their businesses. However, because of his constant promotion of “patriotism” and “anti-capitalism,” in the eyes of some, he seemed to possess a certain inherent political correctness. Therefore, despite criticisms from the media and legal circles towards Sima Nan, he managed to stand firm.

On March 21, according to reports from People’s Concern and JiMu News, Sima Nan responded to the tax evasion fine by “admitting guilt, sincerely reflecting, not seeking forgiveness.”

Sima Nan claimed that this incident was mainly related to his trust in an MCN company to “handle tax payments.” Over the past six years of cooperation with a certain MCN, he received over six million yuan in remuneration, but ended up paying over nine million yuan in fines and late fees. He also mentioned that while his social media accounts were banned over four months ago, the tax authorities had already initiated enforcement actions and investigations.

However, an article published by NetEase pointed out that from Sima Nan’s statements, his apology appeared to be insincere. It seemed that he simply wanted to shift the blame onto the MCN company that operated his self-media. As a taxpayer, it would be easy for Sima Nan to determine whether the MCN company actually handled tax payments. Moreover, a bigger issue arises from his apology, which also implicates his circle of friends.

The report stated that the MCN company to which Sima Nan belonged is a notorious large-scale self-media operation company, with many popular internet celebrities associated with it. Sima Nan’s attempt to blame his friends reveals a significant problem: if this MCN company is so untrustworthy, then are other like-minded internet celebrities also evading large amounts of taxes?

In fact, Sima Nan had already been banned from the entire internet by authorities in November of last year.

Sima Nan’s social media followers on platforms such as Douyin, Baijiahao, Kuaishou, Toutiao, Weibo, and Bilibili reached 37.364 million, 5.426 million, 5.174 million, 3.963 million, 3.212 million, and 1.62 million, respectively. Combined across these platforms, Sima Nan had accumulated over 56 million followers.

Once the news of Sima Nan’s “tax evasion and fine” broke, it quickly sparked widespread discussions among the public, with netizens calling it “ironic” — Sima Nan had criticized internet celebrities like Viya for tax evasion on multiple occasions and had posted 75 videos related to tax issues, only to now face a similar problem himself.

Sima Nan’s carefully crafted public image has instantly crumbled, becoming a joke on the Chinese internet. Many netizens mocked him, saying, “We saw through him a long time ago,” “He criticizes America for work, but lives there,” “His words are all ideology, but his heart is all business.”

According to reports from NetEase Finance and Daily Economic News on March 21, Sima Nan’s business empire is centered around internet traffic and encompasses self-media advertising, brand endorsements, and related enterprises.

Records from Tianyancha show that Sima Nan is associated with six companies, including Sanya Yajun Sima Nan Cultural Studio, Beijing Media Chinese Film and Television Planning Center, Beijing Media TV Broadcasting Center (deregistered), Beijing Guohong Economic and Cultural Information Center (deregistered), Beijing Media Cultural Development Co., Ltd. (deregistered), and a branch office of Beijing Media Decoration Co., Ltd. (revoked), with only two of them currently in operation.

Among these, the Beijing Media Chinese Film and Television Planning Center, established in 1999 with a registered capital of 100,000 yuan, is a small enterprise, while the Sanya Yajun Sima Nan Cultural Studio, founded in April 2023, is operated as a sole proprietorship by Sima Nan.

As reported by NetEase on the 21st, former team members of Sima Nan once revealed that each of his highly controversial and high-traffic videos brought in revenue in the millions.

As early as August 2022, netizens exposed that Sima Nan had purchased real estate in the United States, owned by his son Yu Jiaao and wife Liu Songfeng, with a purchase price of $583,700 in 2010, now valued at over a million dollars. Additionally, a commentary article from NetEase also uncovered two other properties owned by Sima Nan in the United States.

Following the escalation of the incident, Sima Nan publicly admitted on Weibo to purchasing real estate in the United States, but the circumstances surrounding the properties were significantly different from the information previously leaked. Subsequently, all of Sima Nan’s social media accounts were officially banned.

Later, Sima Nan’s former “friend,” Li Sulu, the CEO of Hejun Entrepreneurship Consulting Group, released a video refuting rumors online that he was Sima Nan’s manager, while also discussing how he and Sima Nan earned money through online videos.

[Extended Reading:

Sima Nan’s “friend” Li Sulu reveals Sima Nan’s money-making path.]