China clamps down On Big Tech, Calls Out Xiaomi for Tax Errors

China clamps down On Big Tech, Calls Out Xiaomi for Tax Errors

 

China’s Finance Ministry said Xioami Corp made errors in its accounting, causing the company’s Hong-Kong listed shares to dive down amid a wider sell-off of China tech stocks.

Other internet companies were also named in the inspection by the Ministry of Finance. The firms include the online game developer, Wuhu Sunrong Sanqi Interactive Entertainment Network Technology Co Ltd and E-commerce giant Suning.com among others.

The ministry said in its report that Xioami has made errors on corporate gifts and aged incorrectly recorded some corporate costs. The document notes that the firm has already rectified the errors.

It also noted that other companies had attempted to evade taxes by shifting their profits overseas.

Xiaomi is yet to comment on the report.

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This is the latest of Xiaomi’s problems in the wake of a massive sell-off of tech stocks in China that has affected peers like Alibaba Group Holdings Ltd and Tencent Holdings Ltd. Xioami stock Is presently down 30 percent since the initial public offering (IPO) in July.

China’s aggressive cleaning of its economic space is seeing it advocate more tax responsibility in entertainment and business. The country is presently reviewing its tax code and cracking down on evasion on a wide scale clean up that spotlighted Chinese Star Fan Bingbing in recent news.

Even with its dipping price, Xioami has reported healthy smartphone sales in 2018. Earlier this month it said it has already surpassed its full-year sales goal of 100 million handsets

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