The Hong Kong Journalists Association (HKJA) has said it was ordered to pay HK$730,000 in provisional taxes within days and has accused the city’s tax authorities of misallocating public resources with audits on independent media.

HKJA chairperson Selina Cheng held a press conference on Monday morning – ahead of an Inland Revenue Department (IRD) press conference in the afternoon – to disclose the tax demand and to update on tax audits faced by media outlets and individuals linked to the independent media industry.

Cheng said the HKJA received a letter from the IRD on April 13, demanding that the press union “pay the HK$730,000 provisional tax within two days.”

This year’s amount is more than double that of last year, when the HKJA had to pay HK$300,000 prepaid taxes.

In May last year, the union first revealed that the city’s independent news sector has been facing simultaneous tax audits and backdated demands, affecting six media outlets, including HKFP, and 20 individuals linked to the independent media sector.

Since then, the union has been notified of a “small number” of new cases, Cheng added, without elaborating further.

Cheng also said that four tax investigations had since closed, including those of Hong Kong Free Press (HKFP) and InMedia.

HKFP’s tax probe was settled with a HK$57,692 payment, including penalties, last year, following a 20-month investigation spanning seven years of records. HKFP chose to settle to avoid the likely prohibitive cost of further disputing a modest discrepancy.

The alleged HK$3,020 underpayment in the 2021-22 assessment year was worth 0.78 per cent of HKFP’s income that year.

“The settlement paid by HKFP represented a 135 per cent penalty surcharge, which surpassed the maximum surcharge stipulated by the IRD for a penalty imposed after prompt and full disclosure,” Cheng said.

“The highest penalty surcharge for a prompt disclosure upon receiving a tax probe stands at 100 per cent, according to the IRD.”

InMedia contested its tax demand, finding that it had owed nothing in taxes, but had to shell out HK$40,000 in administrative and accounting fees to challenge the investigation, the HKJA head said.

“They were found to be at zero fault, but they spent HK$40,000 on auditing and accounting fees, as well as countless hours that they spent themselves on handling paperwork and books,” Cheng said.

She added that the tax audits into one reporter and an independent journalist had also been closed.

‘Undue stress and unfair punishment’

Cheng said that the IRD’s investigations into the independent media industry had diverted public resources away from identifying unpaid taxes by high-value individuals and companies with a clear intent to evade taxes.

She pointed out that the settlements from the probes paled compared with the average backdated tax payment and penalty, which reached HK$1.6 million in the 2024-25 tax year and HK$1.7 million a year earlier, according to official figures and the union’s calculations.

“I accept that for the purpose of law enforcement, there needs to be some random checks, but clearly this is not random,” she said of the IRD’s tax audits into the media sector. “It also imposes undue stress and unfair punishment on the media.”

The tax probes also appeared to be aligning with practices in countries that have charged journalists with tax evasion and fraud “to undermine their credibility,” Cheng said.

Speaking at a press conference on Monday afternoon, Inland Revenue Commissioner Benjamin Chan dismissed claims the department had targeted the media sector, adding that the IRD was not able to comment on individual cases due to its privacy terms.

“In our procedures, the IRD does not consider the background or occupation of taxpayers. We are only considering whether there is any risk of a case underpaying or evading taxes,” he said.