Collections from the recently implemented property tax have exceeded government expectations by double, according to government officials.
The tax collection on properties, including land and property, has hit US$12 million since the law was passed, according to Om Chorn, deputy general director of the taxation department at the Ministry of Economy and Finance.
“We expected to collect about US$6 million in revenue from the tax through 2011, but the estimate doubled,” he said.
The surprise increase on the estimate was due to a raised awareness of how to pay the tax, he added.
The collection was conducted in 113,885 sites throughout the Kingdom according to data obtained from the tax department
“I think the law will help increase the state income, and because it’s the first tax payment of its kind, will introduce a tax culture,” Om Chorn said, adding that the majority of property owners had now paid the tax.
The law, which was twice delayed due to a lack of government resources, was formally implemented in 2011 and concluded on December 31, last year. It applies to properties worth $25,000 an above, with owners required to pay 0.1 per cent of the properties value.
Some experts believe that while the tax will benefit the Kingdom’s economy, many proprietors are unhappy with the new law since it came into effect.
“Although people are upset, they can not avoid paying required tax,” said Chheng Kimlong, business and economics lecturer at the University of Cambodia.
However, some issues do remain with the law. In some cases, two similar properties have received different valuations, he added.
“If it’s unaccountable, the state will lose this new income,” Chheng Kimlong said, adding that the progression of the economy depends on pillar sectors, such as real estate.