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News - August 5, 2021

China’s state media says tax breaks given to gaming firms should cease

“China should stop handing out tax breaks to gaming companies because they’ve become global players that thrive on their own, a government-backed newspaper said, fanning uncertainty about a potential crackdown on Tencent Holdings Ltd. and its peers,” reported Bloomberg.

Details:

  • The Securities Times, a Chinese state-owned newspaper, said that local governments should drop incentives for gaming companies in an attempt to encourage the development of a domestic software industry.
  • Gaming firms must also assume more responsibility and give back to society through higher taxes, the newspaper added in its commentary piece.

Dive deeper:

  • This comes on the heels of another state media article that described gaming firms like Tencent as “spiritual opium.” Though the article has since disappeared from the web, its mention of Tencent cost the firm US$60 million in stock value. Soon after, the Chinese gaming giant announced curbs on access to minors for its flagship video game, Honor of Kings.
  • Recently, China’s top state propaganda vehicles have also pushed to limit the role of algorithms in content distribution, a policy move that could translate into higher compliance costs for online content providers such as ByteDance and Tencent.

source: https://www.techinasia.com/chinas-state-media-pushes-stopping-tax-breaks-given-gaming-firms