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Logo of Phnom Penh Post newspaper Phnom Penh Post - Hun Sen says Cambodia Daily must pay its $6.3M tax bill or ‘pack up’

Prime Minister Hun Sen speaks at the 2nd National Forum on Protecting and Conserving Natural Resources yesterday in Phnom Penh.
Prime Minister Hun Sen speaks at the 2nd National Forum on Protecting and Conserving Natural Resources yesterday in Phnom Penh. Facebook

Hun Sen says Cambodia Daily must pay its $6.3M tax bill or ‘pack up’

Prime Minister Hun Sen escalated the government’s attacks on media outlets and NGOs yesterday, reiterating in a speech that the Cambodia Daily would have to “pack up their things and leave” if they failed to pay a $6.3 million tax bill, while at the same time vowing to disallow the NGO coalition “Situation Room” from monitoring next year’s election.

In a wide-ranging speech at an environmental forum, the premier lashed out at the English-language newspaper for failing to pay taxes over the last decade – at one point calling it “chief thief” – and at the same time singled out European Union Ambassador George Edgar for helping to fund the Situation Room and election monitor Comfrel.

The Daily was slapped with a $6.3 million tax bill – which was leaked to the media – earlier this month, and was given 30 days to pay up or face closure and the seizure of its assets. Until the premier’s statement, only Kong Vibol, director of the Tax Department, had called for the Daily’s closure if they failed to pay back taxes.

“It is too much and the ‘chief thief’ does not pay the tax to the state for about 10 years. If you want to stay, please pay the tax to the state,” he said. “If you do not want to pay the tax to the state, please pack up your things and leave.”

Hun Sen also took umbrage at the case being called political in nature – a seeming reference to a statement put out by the Daily earlier this week. “When Cambodia acts, you say that it is political. It is just crazy,” Hun Sen said. “They can abuse us as much as they want to?”

The Daily’s deputy publisher, Deborah Krisher-Steele, has maintained that she was unaware of the “debt” when she took over the paper from her father, Bernard Krisher, and has also pointed to its being run as a nonprofit prior to the takeover, suggesting charitable donations should be taken into account when calculating its tax burden.

Yesterday, Krisher-Steele again reiterated that the Tax Department had not justified the enormous tax bill nor granted “the legal right of every tax payer in Cambodia” – an audit from the department.

“This is a chance for P.M. Hun Sen to show his leadership and prove that he is capable of running his agencies competently and that there is no political motive behind the move to shut down the Cambodia Daily,” she said in an email, adding that they were willing to pay any tax obligations after a “fair legal process”.

Douglas Steele, the newspaper’s manager, compared the current row between the premier and the paper to a controversy in 1965, in which he said an article written by Bernard Krisher for the American magazine Newsweek about King Norodom Sihanouk was in part responsible for Cambodia’s severing of ties with the US. After the incident, however, the two started a long friendship, and Krisher penned two volumes of the King’s memoirs.

“If the Prime Minister is outraged, he’s making the same claim (and mistake) that King Sihanouk did in 1965,” Steele wrote in a statement.

“Hopefully we can fast forward through the current political theatrics and get on with solving some of the problems for Cambodia’s next generation; the shortage of high schools, a non-existent foster care system and preserving a free press.”

During yesterday’s speech, Hun Sen also turned his focus to Ambassador Edgar of the EU, one of the international donors for election monitors. The premier has repeatedly accused the election monitoring coalition the Situation Room of not having registered as an NGO, and of undermining the government.

He announced yesterday that the Ministry of Interior would not allow the NGO election monitoring coalition to operate next year. “His Excellency Edgar, your team sponsored the Situation Room. The Situation Room is like a war command room. Why did you create it in Cambodia?” he asked.

Edgar said yesterday the EU had financially supported NGOs engaged in election education and election monitoring for the June 4 ballot, just as it had to support the National Election Committee’s efforts.

“At what stage such a collaborative effort effectively becomes a new entity that requires registration is an issue of interpretation of the law, but in general I believe collaboration between NGOs working on similar issues should be encouraged,” he said.

Comfrel’s Yoeung Sotheara said there was no legal backing to “ban” the Situation Room but that the NGO and other groups would individually continue their monitoring activities.

“The ban is to narrow the democratic space and participation of CSOs in the upcoming elections,” he said.

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John Lowrie's picture

There can be no doubt that the timing cannot be coincidental for the non-payment of taxes to have arisen. It is just one "Sword of Demacles" that has been kept in reserve. If the parties to the dispute followed precedent - and I have dealt with several organisations needing to comply with what are reasonable laws to pay taxes - then there would be an agreement to pay tax immediately to stay in business with a negotiated compromise on how far to go back to pay arrears. Tax authorities have always been reasonable. In fact they have waived arears from previous tax years. The Daily probably has good reason to expect similar treatment as it was created in what was (and to some extent still is) a murky area of not-for-profit governance that is based on individual circumstances and connections rather than a body of law and regulation. The fact is many such organisations were established usually with some kind of official approval by public authorities and it was only about 10 years ago that the government began to pay attention to formalizing them for various purposes. One of those was to pay payroll taxes, ironically under pressure from donors to increase national revenue, an issue no doubt the Daily covered. Before then, and even explicitly stated in MoUs with government, organisations enjoyed exemption from taxes and fees. These concessions were given to encourage incoming investment, to generate employment and develop the country. Similar ones still exist for example in Special Economic Zones. There can be little doubt Bernie Krisher in that sense has contributed much to Cambodia and that ought to be the main factor in the authorities deciding how much in arrears should be paid.