Upping The Ante
I wrote yesterday about Google’s ongoing struggle with the Chinese government. Just last night, Chinese media reported that Google and three companies affiliated with it are now under investigation for Chinese tax fraud:
Three companies affiliated with the search engine Google have been investigated for tax fraud in China, Thursday’s Economic Daily reported, citing sources with China’s tax authority.
The companies have been found using fake invoices, and accounting and business tax irregularities were also discovered that involved more than 40 million yuan (6.06 million U.S. dollars), the newspaper said.
Google is also under investigation for tax evasion, the newspaper said.
It’s unclear whether the timing of these investigations is related to Google’s accusations that the Chinese government is deliberately disrupting Gmail service, but it’s hard not to want to connect the dots. But Google could very well be guilty of breaching Chinese tax law. The company has engendered much discontent with its evasive tax policies that transfer revenue to tax shelters in Bermuda.
It seems that by reporting this new so broadly (it was the lead story on the evening mobile phone news) the government is sending a message to the supporters of Google, or at least trying to question the company’s reputation. Could this be part of a larger strategy to further limit Google’s presence in the mainland? Perhaps radioactive rain isn’t the only thing we have to worry about.