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VAT, import tax waived on 757 cars registered as state owned

Content image - Phnom Penh Post
Cars with RCAF number and police number plates park in a parking lot in Phnom Penh last year. Heng Chivoan

VAT, import tax waived on 757 cars registered as state owned

The government has exempted 757 vehicles that bear police licence plates from import taxes and the value-added tax (VAT), because payment of such fees on state-owned vehicles would fall under the responsibility of the state.

The spokesman for the Ministry of Interior confirmed that the vehicles for which tax exemptions were requested were all donations from individuals to police units under the command of the ministry in service of the public interest.

Prime Minister Hun Sen had earlier remarked on December 28 that Minister of Interior Sar Kheng requested waivers on import duties and VAT for 757 vehicles bearing police licence plates.

“[The government] has agreed in principle to waive the import taxes by assigning payment of the taxes for 757 police-registered vehicles at the Ministry of Interior to the state,” said a letter signed by Council of Ministers secretary of state Ken Satha on December 31.

Interior ministry spokesman Khieu Sopheak told The Post on January 2 that the vehicles were older ones that had been used by units under the ministry and that they had no import taxes paid on them originally because the cars were donated by people to the ministry for use in public service.

“All the vehicles also have the proper police licence plate numbers, which means that they are being used to transport officers and for official duties.

“We requested tax exemption for them so that the interior ministry would not have to spend funds from its approved budget – provided by the state – just to pay taxes back to the state again,” he said.

Pech Pisey, executive director of Transparency International Cambodia, said tax exemption for state vehicles was normal and done in order to eliminate unnecessary use of bureaucratic resources shifting the state’s own money around in a circular paper trail.

He stressed, however, that some cases needed to be scrutinised further if there is any possibility of fraud taking place such as a situation where the state is being asked to waive taxes on vehicles that are registered under public ownership when in reality they are being used privately by one individual and for purposes unrelated to police work.

“These tax exempt vehicles must be state-owned, which means that when the tax exempt vehicle isn’t in use, it must be returned to the state’s control. Once they stop using it to serve the state they have to pay taxes on it as normal,” he said

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