Prime Minister Hun Sen has quashed an attempt by the Ministry of Finance to collect back taxes owed on 470 police vehicles, granting them tax-exempt status after a request from the Ministry of Interior. The request, dated September 8, was approved on Tuesday.
The decision marks just the latest in a series of back-and-forths between the ministries.
In 2015, five unregistered police vehicles were impounded by the Finance Ministry. Earlier this year, the Interior Ministry appealed for leniency. A temporary respite was granted, but on September 1, Finance Minister Aun Porn Moniroth demanded that all back taxes be paid by the end of the month.
But Interior Minister Sar Kheng then pled for lenience from Hun Sen.
“The Ministry of Interior asks for permission from Samdech Prime Minister to exempt the import tax for 470 National Police vehicles and register them in the list as the state property of the Ministry of Interior,” the letter, signed by Kheng, read.
“National Police need vehicles to crack down on crimes, strengthen security, public order and social safety,” Kheng’s letter continued. The letter also requested that these vehicles be equipped with the National Police logo and insignia.
Interior Ministry spokesman Khieu Sopheak said he hoped the Finance Ministry would honour Hun Sen’s decision, while acknowledging that the vehicles were owned by individuals who used them for both personal and official business.
“They provide security for the nation, and it is not a waste of the national budget to help the nation,” he said yesterday.
Sopheak said that the 470 vehicles receiving tax exemption represented all vehicles with unpaid taxes that were registered to police officers.
San Chey, a fellow at the good governance NGO Affiliated Network for Social Accountability, estimated that the exemption was costing as much as $7 million in uncollected taxes. “Five million dollars is my lowest calculation, with $7 million my highest,” he said, noting that the cars usually driven by police officers were “luxurious”.
Chey added that he believed the cars were not official police vehicles, but “civilian cars” used for personal reasons and often loaned to family and friends.
“Hun Sen wants to please the police,” Chey said, explaining the premier’s decision.
“He wants the support of the police so they will enforce his orders well.”
Ministry of Finance officials could not be reached.