Hong Kong press union says gov't made ‘mistakes,' ‘unreasonable claims' in independent news sector tax audits

HKFP

22-05-2025

The Hong Kong Journalists Association (HKJA) has said that the government's tax authority made errors and 'strange, unreasonable claims' when auditing independent media outlets and issuing additional demands.
'We've noticed that the Inland Revenue Department (IRD) made numerous mistakes while reviewing the tax [records of media outlets and reporters],' Selina Cheng, the chairperson of the union, said in Cantonese on Wednesday.
facing simultaneous tax audits and backdated demands.
At least six independent outlets and 20 individuals, including the heads of media outlets and their spouses, have received notification of audits and additional tax demands since November 2023, Cheng said.
The outlets include InMedia,The Witness, ReNews, Boomhead, HKFP, and one that did not wish to be named.
The financial years being probed span the full six or seven years allowable under the IRD's remit. Those inspected usually receive a notice of assessment of additional tax first, the press union chief said. Then, they are requested to pay a provisional tax demand before the investigation into any alleged underpayment is complete.
Cheng said an individual who did not run any companies received a notice from the IRD with a company Business Registration (BR) number, and was asked to pay tax for the firm. The union searched the number and found that it did not exist.
'That journalist was asked to pay profits tax even though they didn't conduct any business,' she alleged.
Another media outlet had its tax audited for a financial year before the company was even established, Cheng added.
'We noted that the IRD had some kind of strange, or unreasonable claims with details that we noted that didn't make any sense,' Cheng has said.
In some other cases, Cheng said the IRD had calculated individuals' taxable income as double the actual amount.
Cheng told HKFP on Thursday that the union was undecided as to whether they would approach the government watchdog, the Ombudsman, about the apparent errors.
In response to HKFP about the journalist group's claims, the IRD said on Wednesday that the authority 'has established procedures' to review the information provided by taxpayers and to verify the amount of tax payable.
'If there is any information showing that any person may have breached the provisions of the Inland Revenue Ordinance (IRO), the IRD will follow up the case in accordance with the IRO,' the IRD said.
Statement: HKFP, which was 'randomly selected' for an audit in 2024, has always met its tax obligations, paid demands immediately, and ensured meticulous record-keeping.
Donor data was withheld in paper submissions to Inland Revenue, with all 'hold' demands reduced to HK$0.… pic.twitter.com/3v2SPlKfop
— Hong Kong Free Press HKFP (@hkfp) May 21, 2025
It added that the 'industry or background of a taxpayer has no bearing on such reviews.'
In a statement on Wednesday, HKFP said it has been cooperating fully with its tax audit, having 'always met its tax obligations, paid IRD demands immediately, and ensured meticulous record-keeping since our 2015 inception.'
The HKJA itself has also faced a probe. In January, it said the IRD demanded HK$400,000 from the group after reviewing its 2017-2018 accounts.
'Additional time and energy'
According to the HKJA, the total amount demanded from the six media outlets and other related organisations was around HK$700,000, while the total amount demanded from individuals was around HK$1 million.
Companies and individuals have a month to raise objections, according to IRD procedures. Cheng said all the media outlets, individuals and the HKJA raised objections and most of them saw the requested payment of provisional tax suspended.
However, being subject to such audits burdens the independent media sector, which often has limited resources and manpower.
'They have to budget for additional audits, additional legal fees, additional time and energy seeking professional advice,' she said.
Reports of government scrutiny come as the state of press freedom in Hong Kong remains in the spotlight.
In the annual Reporters Without Borders (RSF) Press Freedom Index, released last month, Hong Kong tumbled five spots to enter the 'red zone' – meaning a 'very serious' situation – for the first time, alongside China.
Since the Beijing-imposed national security law came into effect in 2020, dozens of civil society groups have shuttered. Two of Hong Kong's biggest independent media outlets – Apple Daily and Stand News – also saw their offices raided and their top staff arrested.
Apple Daily's founder Jimmy Lai, who has been remanded since December 2020, has been charged with two counts of conspiring to collude with foreign forces under the Beijing-imposed national security law, and a third count of conspiring to publish seditious materials under colonial-era legislation.