We examine how taxation information affects corporate environmental investments. Using a difference-in-differences design based on the implementation of China Taxation Administration Information System III (CTAIS-3), we find that firms’ environmental investments decrease substantially two years after introducing the taxation information technology system. Furthermore, we demonstrate that CTAIS-3 mitigates information asymmetry, resulting in firms reducing their environmental investment through both an taxation enforcement channel and an information channel. Additional analyses reveal that firms with more severe asymmetric information or fewer constraints on mandatory environmental investments are most affected by the shock to tax information. The non-compulsory investment categories, such as ecology restoration or general environmental protection experience a greater decline after the launch of CTAIS-3.