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Logo of Phnom Penh Post newspaper Phnom Penh Post - Tax Revenues Begin to Flow After Govt Warning

Tax Revenues Begin to Flow After Govt Warning

Tax revenues for July showed a three-fold increase over June following tough government

warnings that it would crackdown on tax evaders.

The Phnom Penh city Tax Department collected an estimated 60 percent of its target

amount, up from only 20 per cent in June.

Government-run radio and television has began broadcasting appeals to members of

the public to settle their tax arrears or face severe penalties.

Chan Soeun, director of the Phnom Penh Tax Department, said that a lot of people

had been waiting to see what kind of government would be formed after the May 23-28

election before they paid their taxes. He said the former State of Cambodia administration

had not enforced tax collection in its last months in power for fear of upsetting

the electorate.

Chan warned the new government would strictly enforce the tax code and appealed for

understanding at the same time. The cash-strapped administration desperately needed

new funds to rebuild the country after more than 20 years of war, he said

For 1993, the city administration is authorized to raise 170,000,000 riels in taxes,

which forms about 30 percent of the government's annual income.

The government also plans to crack down on illegal imports, especially of cars, motor-cycles,

cigarettes and alcohol. According to the Customs House, 300-600 cars and thousands

of motor-bikes have been smuggled into the country from Thailand each year since


Police estimate thousands of the cars on Phnom Penh's streets do not carry official

license plates or have proper registration meaning a further loss of revenue.

Customs officials on the Thai and Vietnamese borders have been ordered to curtail

the flourishing black market trade, which by some estimates accounts for almost half

of all business done in Cambodia.

Sor Ho, the director of the Customs House, said his officers face difficulties dealing

with large-scale, well-armed smuggling operations which can exploit Cambodia's long

unmarked borders.

"How can we control a hundred of entrances along the land and sea border,"

he said.

However, Chandy, a businessman from Koh Kong, said that it would not be easy for

smugglers to bring their goods onto the Phnom Penh market without bribing customs

officials and police.

"It is impossible that the smugglers could pass several check points from the

border to Phnom Penh. Bribes have been given to them for closing their eyes. Chandy

complained that of all the government employees, only the customs officers and police

check border points can earn quick money from smugglers.

The government policy divides tax collection into two categories-imported tax and

annual tax, which includes tariffs on rental accommodation, real estate, land, transportation,

business, manufacturing, services. The taxes range from four to 12 percent.

The government's determination to collect taxes has angered many of the people who

voted for it.

"We voted for the new government because we thought they would make life better

for us, but it seems to be worse for the poor," said Seath, a 38-year-old motor

taxi driver.

"A large percentage of the people who voted for them are poor but we have only

received much trouble. I have to pay a motor-bike tax, house tax, and my wife was

forced to remove here street-side stall," he said.



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