The General Department of Taxation (GDT) has warned that it will act against individuals who deceive others in an attempt to avoid paying tax. Such crimes are punishable by up to five years in prison.
The warning came following cases in which individuals had tricked or coaxed people into holding positions such as owner or board director when setting up companies at the Ministry of Commerce. Their names had also been used to register with the General Department of Taxation.
When receiving certificates of Added Value Tax (VAT) registration, the unsuspecting victims were taken to issue fake invoices for other companies with the purpose of forging them for inclusion as an input tax credit.
Such tax credits will serve as the deduction of tax on output and include the burden of expenditure to deduct income tax, the GDT said on Thursday.
GDT director-general Kong Vibol, who signed the notice, said offences such as tax avoidance and those involving tax regulations carry sentences of between one and five years imprisonment.
“The GDT will take all legal measures to find the individuals who commit such offences and punish them in accordance with the law. So to avoid punishment, the public and all businesspeople, please properly implement the tax laws,” he said.
Disregarding other punishments, the owners and boards of directors of enterprises, editors or any individuals responsible for enterprises that avoid tax will be punished under Article 127 of the Law on Taxation, fined between 10 million and 20 million riel and sentenced to one to five years in prison.
Vibol could not be reached by The Post on Thursday for comment.
Last month, the GDT said that for the first five months of this year, tax revenues collected by online data management systems had amounted to 5.34 billion riel ($1.34 million). This accounted for 58.37 per cent of annual tax planning.
Compared to the same period last year, the figures were an increase of 1.17 billion riel ($291.73 million), which accounted for 27.94 per cent.
Speaking to The Post, Preap Kol, the executive director of Transparency International Cambodia, said on Thursday that such warnings from the GDT were not new, but the implementation of the law required measures to prevent tax dodging.
Government-collected tax revenues had increased from eight to 20 per cent, which proved that the implementation and strengthening of the law had improved, he said.
“It is a marked increase … and we hope that there will be further increases when major businesspeople, oknha [tycoons] and wealthy and powerful traders pay their taxes,” he said.