Economy and finance overview for Q4 of 2017

The Department of Taxation in Phnom Penh. pha lina
The Department of Taxation in Phnom Penh. Pha Lina

Economy and finance overview for Q4 of 2017

October 24, 2017
The National Bank of Cambodia, in cooperation with Acleda Bank, Sathapana Bank and Prasak Microfinance Institution, has announced the launch of “Cambodian Shared Switch” in beta version, which is a one-stop platform for customers to access inter-bank transactions at ATMs and POS machines of the member institutions with more convenience and speed.

The purpose of the beta version of the CSS system is to enhance a higher level of fintech (financial technology) and to reduce the use of cash in the market as well as to promote the efficiency of payment transactions in Cambodia and encourage a wider range of inter-banking service via more transaction methods to customers.

A new advertisement for the new taxation e-pay app. supplied
A new advertisement for the new taxation e-pay app. Photo supplied

October 25, 2017
Perhaps as a commemoration day of the birth of His Majesty The King Norodom Sihanouk on October 30, 1922, the National Bank of Cambodia announced the release of a new money bill, the 5,000 riel note, throughout the whole kingdom. The new money is 142mm by 68mm and coloured with purple and brown.

The right side of the bill (pictured below) consists of the portrait of His Majesty the King Norodom Sihanouk Varman when His Majesty was leading a movement for independence against the French colony, as well as other carvings and designs.

In the centre area of the back side of the bill, there’s a photo of a 9-headed dragon in front of Kampong Kdey ancient bridge and the view of the bridge body from an angle to the right. On the bridge photo, there are designs of carvings from Banteay Srey temple with the words “5 Thousand Riels” and many other ornamental designs.

However, the National Bank of Cambodia did not confirm how many copies of the new bill have been printed.

October 25, 2017
Chea Chan To, Deputy Minister at the National Bank of Cambodia, has signed on to the announcement of “Certificate Conferring for Rural Credit Institutions”, consisting of 25 articles written on 8 pages. In the articles, there are also explanations, terms and conditions for all the institutions to operate and follow. In Article 5, the Ministry of Commerce says it is the responsibility of companies to have capital verification documents, credit policies and a 3-year business plan.

Article 6 states that: The institution must obtain a registered amount of capital investment of 200,000,000 riels (about $50,000), and before the operation starts, the institution must deposit 100% of the registered amount into an account that is already open at the National Bank of Cambodia. The institution must also deposit a 5% guarantee amount on top of the total capital investment registered and deposited into the account open at the National Bank of Cambodia.

Content image - Phnom Penh Post

November 28, 2017
According to Norihiko Kato, CEO of Sathapana, the bank now has 168 branches in the whole Kingdom and 4,200 staff members. He said that Sathapana has spent about $2 million on changing their logo and it has been released for official use at the end of November this year to avoid confusion with the governmental institutions.

By October of this year, the loan given by Sathapana has risen up to $750 million, a 23% increase if compared to 2016 which was only $611 million. Deposit amounts have also sparked up to $640 million by the end of October, whereas 2016 had only $583 million.

Norihiko stated that the bank will consistently branch out even more while more digital banking services are being released, including the spread of more ATM machines, mobile banking services and international banking services as well.

Sathapana Bank is one of the many institutions that were determined early this year to change their logo to response to the critiques against the government and to differentiate from governmental institutions.

Acleda Bank was the first bank that government had ordered to change their logo to avoid confusion by the public, sparking the bank’s expense of about $3.5 million.

December 5, 2017
The National Bank of Cambodia has organised an annual macroeconomy session for quarter 4 on December 5, 2017 about “The Role of Technology in Promoting Inclusive Finance in Cambodia”.

The purpose of this conference is to contribute to Cambodia’s research capabilities on critical topics related to macroeconomic and the finance sector and to promote discussions between stakeholders among researchers, experts and policy makers. This is especially needed to exchange important knowledge and the discuss the growth of integrated technology in the financial sector and to contribute to the Cambodian government’s policy in promoting inclusive finance. The 3 topics that were brought into the conference were: (1) mobile phone usage and inclusive finance, (2) growth and influence of technology in terms of receiving financial services, and (3) the role of technology in promoting inclusive finance based on “experience from India”.

December 11, 2017
According to a press release by the General Department of Taxation (GDT), the department has collect a total of $1.8 billion in VAT taxes for the first 11 months of 2017. The total increase compared to 2016 is $419 million, equivalent to 29,75%.

The same press release was publicized in the evening after a summary meeting of the GDT on December 11, 2017. The GDT has also announced that, in November alone, they have collected up to $143 million.

The report has indicated that the increase is due to the collection from almost all type of businesses, especially main VAT taxes, such as taxes on income (an increase of 31%) and value-added tax (29.80%), while special tax rose to 15% and tax on salary went 8.6% higher.

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