THE Municipality of Phnom Penh aims to collect US$12 million in property taxes in the first year, with the funds earmarked for city improvements, Governor Kep Chuktema said.

“Our city is more developed, but it is not enough. We need a larger budget to develop a lot of projects in the city, to compete with other cities in Asia,” said Kep Chuktema on Wednesday.

“If we do not try to collect more profit, we will face a large problem,” he said.

Announced in 2009, the 0.1 percent annual tax applies to real estate with a valuation of more than 100 million riel (US$24,510), with a few exemptions. Properties are expected to be registered by September, with 2012 as the first full year of property tax collection, he said.

Developers said they supported collecting property taxes, but called for transparency on how the funds were collected and spent.

Khneg Ser, assistant to the management team of the proposed $2 billion Camko City satellite project, said it was in line with practices in most countries.

“I think we should implement this tax, as [the funds will] contribute to increased economic growth in Cambodia,” he said. “We support it, and will follow as the government requires.”

He added the government should ensure that all eligible property owners and housing developers pay the applicable taxes.

However, some voiced opposition to the state-ordered property taxes, saying it would hit a property sector still in recovery.

Dangkor district land owner Cheap Sareth said he felt it was too early for the government to begin collecting property taxes.

“The government is moving too early to collect tax on property while the country is still recovering from the global economic crisis,” he said.