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Ministry explains tax hikes on heavy transportation vehicles

A truck loaded with soil travels along a road in Phnom Penh's Chroy Changvar district in 2014.
A truck loaded with soil travels along a road in Phnom Penh's Chroy Changvar district in 2014. Eli Meixler

Ministry explains tax hikes on heavy transportation vehicles

The Ministry of Economy and Finance on Monday sought to explain a recent hefty increase in taxes imposed on heavy transportation vehicles, saying it was prompted by a need to support infrastructure maintenance expenditures and cover the elimination of taxes on vehicles smaller than 150cc.

The clarification from the General Department of Taxation came in the wake of the ministry’s June 16 announcement of the tax hikes – the first in 18 years, with some rates increasing as much as 166 per cent. The hikes had been met with displeasure in Kampong Thom, Kampong Cham, Tbong Khmum and Prey Veng provinces.

“This type of vehicle has a great impact on roads and the environment, and the government has to spend a huge amount of resources to build, repair and maintain [roads],” the notice reads, adding that the taxes are still low compared to those imposed on tourist vehicles.

Under the new scheme, 3-tonne vehicles will be taxed about $48.70, 3-tonne to 10-tonne vehicles will be taxed $121.74, 10-tonne to 20-tonne vehicles $243.48, and trucks over 20 tonnes will be taxed $486.96.

The announcement added that the elimination of taxes for motorbikes had cut expenses for millions of people nationwide.

However, the move was not welcomed by Meas Mach, owner of Unit Freight Service, who owns five trucks, each weighing less than 5 tonnes.

“It heavily impacts people like us . . . I believe many are affected since most possess vehicles lighter than 5 tonnes,” he said. “Vehicles lighter than 5 tonnes will not cause road damage – only if the vehicle is heavier, ranging from 30 to 40 tonnes.”

However, he added, “We’ll still pay the price stated by the state since it is our obligation.”

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