Apple imposes 30 per cent tax on China’s digital content creators

Apple is taking a risky – not to mention controversial – step to try to reverse its ailing fortunes in China. The American technology giant has effectively levied a 30 per cent tax on ‘tips’ paid to content creators via social media apps by grateful fans wanting to reward them for their work. Upsetting some of the country’s most influential people – internet celebrities such as live streamers and online writers – by taking such a hefty chunk of their revenues could make things a whole lot worse for Apple, whose own revenues from China have been eroded by the rise of domestic technology rivals.

“Content creators are huge things in China. By taxing 30 per cent on their tipping income, Apple is expecting to see a big boost in its revenue in China in the near term,” said Kitty Fok, managing director of IDC China.

“However, it may not be a wise move in the long run because these content creators, who are influential in China’s virtual world, may discourage people from buying Apple’s iPhones because the new policy will dampen their income.”

In its recently updated App Store policy, the company has for the first time made the use of tipping functions permissible. But it wants a 30 per cent cut of any income from tips received by the providers, who are, in China’s case, millions of hard-working digital content creators，who make a fortune by live streaming their singing and dancing, posting articles of their opinions or sharing their life experience and knowledge online.

Apple stipulated in its latest App Store policy late last week that apps may use and can only “use in-app purchase currencies to enable customers to tip digital content creators in the app”, which means that in-app tipping now officially falls under the category of in-app purchasing, a service for which the California-based company charges 30 per cent on all transactions. Apple was not immediately available for comment. Watch: Apple makes iPhone screen fixes easier

The move has already provoked a certain amount of outrage from China’s technology community. Luo Yonghao, chief executive of smartphone maker Smartisan in China, in an online post on Sunday, described it as “disgusting”. Luo is also an internet celebrity with 14 million followers on Sina Weibo, the Chinese version of Twitter.