Some Hong Kong reporters and news outlets are targeted by unwarranted tax audits, media group says

Hong Kong's tax authorities targeted at least 20 people, including journalists, current or former heads of media organizations and their families, with audits without sufficient evidence, a leading media professional group said Wednesday as it raised concerns over the city's press freedom.

Hong Kong Journalists Association chairperson Selina Cheng said the Inland Revenue Department accused the affected companies and individuals of failing to fully report their income years ago and issued backdated tax demands. Cheng called some of the department's claims “strange” and “unreasonable."

Cheng said the moves added stress to journalists and media organisations and affected their daily operations.

“It does have a negative effect on Hong Kong’s press freedom,” Cheng told a news conference. “Press freedom not only means the ability for media and journalists to operate safely, physically ... It also means the business environment, whether it is sustainable for them to operate.”

In one case, the tax department alleged that a journalist had made a business registration and requested that they pay profit tax for a company they did not run — citing a business registration number that didn't exist, she said. The department also asked to audit a company's profit tax for a year before it was founded, she said.

In an email to The Associated Press, the Inland Revenue Department said it has established procedures to review the information provided by taxpayers and that it will follow up on cases in which information shows a possible breach of rules.

“The industry or background of a taxpayer has no bearing on such reviews,” it said, declining to comment on any case.

Hong Kong journalists have been navigating a narrowing space in recent years amid Beijing’s crackdown on dissent following massive anti-government protests that rocked the city in 2019. Drastic political changes have created an increasingly restricted environment for them in the semi-autonomous Chinese city once regarded as a bastion of press freedom in Asia.

In 2021, Apple Daily and Stand News, popular outlets known for their critical reports of the government, were forced to shut down after the arrests of their top management.

Last year, two former editors of Stand News became the first journalists convicted under a colonial-era sedition law since the former British colony returned to Chinese rule in 1997. One received a 21-month jail term and the other was freed after his sentence was reduced because of ill health and time already served in custody.

Pro-democracy activist Jimmy Lai, Apple Daily founder, is still fighting national security charges that carry a maximum penalty of life imprisonment.

In March 2024, Hong Kong enacted another security law that deepened fears over civil liberties and press freedom.

The Hong Kong government insists that there are no restrictions on press freedom if journalists’ reports are based on facts.

In September, the journalists' association said dozens of journalists and some of their family members and associates were harassed in what it called the largest-scale harassment of reporters in the city that they are aware of.

Cheng said the tax audits affected at least eight organizations, including independent media outlets like Hong Kong Free Press, alongside the Hong Kong Journalists Association and others. At least 20 people, including her and her parents, were also impacted, she added.

Hong Kong was ranked 140 out of 180 territories in Reporters Without Borders’ latest World Press Freedom Index, down from 80 in 2021, with its press freedom situation listed as “very serious” for the first time.