Logo of Phnom Penh Post newspaper Phnom Penh Post - Unconscious tax evasion by some property owners

Unconscious tax evasion by some property owners

Sok Lak makes sure he pays the annual tax for his parents' property, pictured above.
Sok Lak makes sure he pays the annual tax for his parents' property, pictured above. Sreng Meng Srun

Unconscious tax evasion by some property owners

There are only a few months left for property owners to pay their 2017 taxes. Despite the law to pay the taxman being in place for more than five years, it seems some homeowners remain unaware of their financial obligation.

Kong Vibol, general-director of the General Department of Taxation (GDT), told Post Property this week that property tax on home ownership has been in place since 2011.

According to him, 90 percent of tax payers nationwide are aware of the obligation to declare property tax.

“The purpose of tax on property is to rationalise the use of land and to benefit the sub-national administrative budget which was decided by the government,” he said.

Despite the fine for not stumping up the tax being double that of the stipulated tax rate, Vibol said there was still about 10 percent of home and landowners who do not abide by the property tax requirements.

Property tax, which in this case refers to tax on land, houses and other buildings, is an annual obligation for owners of immovable property in Cambodia, applying to both owners of hard and soft titles.

Vibol said property tax is imposed on immovable properties located in all municipalities and provinces that are valued in excess of about one million riel, or $25,000. He explained that the tax collected annually stands at a rate of 0.1 percent of the value of the property.

However, agricultural land, land owned by the state and industrial facilities located in special economic zones are exempt from the tax.

Vibol encouraged all land and home owners to update their current information with the tax department prior to the online tax system process kicking in later this year.

Anthony Galliano, CEO of Cambodian Investment Management, said property tax was a fundamental tariff for the country, highlighting that the tax was beneficial for Cambodia’s national budget.

“Usually, the property tax is quite high, and it can be from three to five percent in most countries but I think the Cambodian government is tolerant and has made the tax low in the beginning to encourage people to pay,” he said.

“The property tax is pretty straightforward and not expensive. The law doesn’t discriminate between local and foreign property ownership in terms of property tax, both are treated the same.”

Galliano said the government was notifying property owners through a variety of media to enhance people’s awareness of the tax.

The distribution of direct letters from the taxation department was one way to inform property owners of their obligation to register and pay tax, Galliano noted.

For Sok Lak, he has to ensure the property taxes are paid for his parent’s house each year.

“My parents’ house has three floors in Tuol Svay Prey commune and I pay around $150 (per year).”

Lok said he didn’t have an issue with paying the tax, but suggested the documentation process for the payments was made easier, adding that the current process could perhaps be a deterrent for people paying the property tax.

According to the GDT, annual property taxes for all property owners are due to by paid by the end of September.

MOST VIEWED

  • Rainsy lands in Malaysia

    Cambodian opposition figure Sam Rainsy arrived in Kuala Lumpur airport on Saturday afternoon after boarding a flight from Paris, where he has been living for more than four years. Ministry of Foreign Affairs and International Cooperation spokesperson Koy Kuong said on Saturday that Cambodia respected

  • Touch: Rainsy will never return

    Sam Rainsy, the “acting president” of the Supreme Court-dissolved Cambodia National Rescue Party (CNRP), has claimed it has achieved 70 per cent of its struggle to find a solution to the current political situation in the Kingdom. Just before boarding a plane at Charles de Gaulle

  • Sokha continues call for dropping of charge after bail conditions reduced

    Not satisfied with having his bail conditions reduced, allowing him to travel freely in Cambodia, Kem Sokha says he wants his charge totally dropped. “As an innocent man who has been in detention for two years even without being found guilty, I continue to demand

  • MEPs' call for Rainsy's safety not European Parliament position

    The European Parliament said on Friday that a statement by 56 Members of the European Parliament (MEPs) calling for guarantees of Sam Rainsy’s freedom and safety should he return to Cambodia did not represent its position. Delphine Colard, the European Parliament’s press officer told

  • Sar Kheng: Rainsy return not blocked

    Minister of Interior Sar Kheng clarified that Cambodia had never blocked Sam Rainsy from returning to the Kingdom. However, he said Cambodia reserved the right to take legal action as allowed by law against activities aimed at destroying the Kingdom. “No one blocked the return

  • Cambodia celebrates 66th Independence Day

    Cambodia on Saturday celebrated Independence Day to mark the end of French colonial rule under the leadership of King Father Norodom Sihanouk in 1953. Thousands of people from all walks of life watched King Norodom Sihamoni light the victory flame at Independence Monument to mark the 66