The General Department of Taxation (GDT) has ordered that all taxpayers show the total amount of their tax invoices in Cambodian riel. The change will come into effect on April 1.
The GDT instruction issued on Monday indicates that tax invoices are required to show total amounts in the local currency, although taxpayers can use either the riel or the US dollar as the base.
The exchange rate to be used is either the official GDT-issued exchange rate of the previous month or the market rate. However, the market rate must not be lower than the daily exchange rate of the National Bank of Cambodia.
Ros Sokhom, managing director of Rosoco Limited, a local auditing firm, on Wednesday said the GDT’s new instruction should match its e-payment platform, which allows individual and corporate taxpayers to pay their obligations online.
While all taxpayers are required to fulfil their obligation in Cambodian riel to GDT, Sokhom said most taxpayers displayed their tax invoice in US currency as they generally obtain the foreign currency for their customers.
“It will initially be difficult for taxpayers to fulfil the GDT requirement because they mostly print out invoices in US dollars, which is automatically set up by the system,” he said.
He said it is not a major issue because taxpayers will try to adjust their accounting systems, but they will need some time to familiarise themselves with the new change.
“By showing tax invoices in Cambodian riel, taxpayers might encourage their customers to pay in riel and that will eventually help to accelerate the use of the riel,” he said.
The GDT officially launched an e-payment platform late in 2017, allowing individual and corporate taxpayers to pay their obligations online and directly through bank accounts.
Later, it launched a separate e-filing system last year, which allow taxpayers to submit relevant documents – including tax invoices – online without needing to mail them to the tax authorities or submit them in person.
The GDT collected over $2.2 billion in total tax revenue last year – up 13 per cent from that raised in 2017.
Cambodia Chamber of Commerce vice-president Lim Heng said there is an increasing trend of riel consumption in the economy, thanks to government tax reforms which require taxpayers to fulfil their obligations in the local currency.
While the new requirement is put in force by the GDT, Heng expressed his optimism that people will pay more attention to riel use as the value of the Cambodian currency firmly maintains stability.
“It will be difficult at first when people are forced to adapt to the new system, but Cambodians should realise that it is their obligation to use the local currency. I have seen an emerging trend of activity related to national patriotism on Facebook among youth."
“They are actively supporting the country, so I believe that if they are asked to use riel to pay for goods, they will show their support and will be happy to do so.”