Khmer Times’ May Kunmakara has the opportunity to discuss the country’s taxation system with the man behind the current push for reform that has led to a more advanced and digitalised system. H.E. Kong Vibol, the director-general of the General Department of Taxation (GDT), explains the role of technology to curb corruption while increasing transparency and efficiency in tax collection and discusses some of the most recent achievements of his department.
KT: Your Excellency, could you please tell us briefly about your work with the GDT since you took over five years ago? What has been achieved?
Excellency Kong Vibol: The biggest achievement for us has been a massive increase in revenue collection, about 20 to 25 percent each year. Since I took on this role, we have consistently experienced a budget surplus. 2017 was the year that revenue collection was the highest in the country’s history: we collected 13 percent, $223 million, in excess of the government budget. Total revenue was $1.93 billion. Five years ago, it was just $759 million.
KT: What are the main factors that have enabled this achievements?
Excellency Kong Vibol: We have been successful because of our commitment to reform. We had a clear agenda to do a sweeping reform of the existing system. I would say we were able to achieve about 97 percent of the goals laid out in our strategy.
Another factor that helped us get to those impressive figures is the adoption of advanced technology applied to tax collection. Before I came onboard, tax collection was mostly paper-based; recording and reporting were carried out as manual processes. Now the tax system has been almost fully digitalise – for example, taxpayers can now file and pay taxes thorough our online portals.
We have done about other 37 important reforms that involved upgrading our IT capabilities. For example, now we are able to manage the staff at the GDT better. Our employees have to log into our platform online every day to report their activities. Supervisors also log into the system to see what their subordinates have been doing and approve their daily tasks. We have created a system to rate every employee according to their performance. Now, officials at the department always come to work on time.
As I mentioned earlier, another great achievement has been the development of our e-payment platform for taxes. With this new system, we know exactly which companies are paying and which are not, and we don’t have to wait for their reports. With the click of a button, I can now tell you exactly how much tax we have collected. This has been our greatest achievement.
Likewise, we have improved the system to manage the collection of road tax. Before my time at the GDT, the process was very inefficient. We sold the sticker to the user, but then there wasn’t a way to keep track of the transaction. Now, however, every car is registered in our database using their licence plate number. We don’t even need to stop cars on the road anymore to see if they’ve paid the tax. We can scan the sticker while they are on the go. If it turns out they haven’t paid, then we stop them. It’s much more efficient.
Another great success has been the creation of an app that allows employees to check how much tax they should be paying out of their salaries. There is also a similar app for road taxes that allows you to see how much you should be paying. These apps can be downloaded for free.
Even the auditing system has been digitalised. Before, tax audits weren’t always recorded. Now everything is recorded automatically.
KT: Why is your department so focused on modernising and digitalising the tax collection system? Why is this such an important element of your work?
Excellency Kong Vibol: As you know, the trend all over the world now is for all systems to become digital. If we hadn’t implemented this deep reforms, we would be falling behind other countries. Now, however, I believe we are pretty much on par with regional neighbours when it comes to our tax collection system.
In fact, we may be more advanced in terms of IT as applied to tax collection than many other countries in the world. We pretty much leapfrogged straight into the very modern systems that we are currently using, while some other countries that have been using less advanced systems for a while are still stuck with them.
We’ve reformed the system three times already. We need to keep on updating and improving to make sure we are keeping up with the times and the latest technology. This is the nature of our digital world.
KT: How is the new system improving tax collection in the country?
Excellency Kong Vibol: Technology makes the tax collection system more transparent and efficient. Now you can create three receipts simultaneously without having to write the information out every time. Time is money, and technology advancements like this help us save time.
Also, people cannot lie about the amount of taxes that they have to pay anymore. The banks where they make the payments have access to our database, so when they go to pay, the bank staff knows exactly how much they owe. The system is completely centralised.
Finally, if you have a plot of land or a house in the province, you no longer have to travel to the province to pay taxes on that property. You can pay in the capital, and the transaction will be recorded with the local branch of the bank in the province. No need to travel anymore. No need to spend money on gas just to go to the bank on the province and fulfill your tax duty. If you are registered with the GDT, it all becomes very simple.
KT: The government is always aiming to increase tax revenue. How can you do so without increasing taxes?
Excellency Kong Vibol: The government has made the decision that it won’t raise taxes. Instead of creating new taxes, we focus on bringing more taxpayers into the system. Everyone must pay taxes, according to your income level and to what’s fair. And we must make it easy for them to pay. Instead of increasing taxes, we chose to focus on reform: the reform of our policy and the tax administration. These two reforms are critical.
First, we look at the existing laws and think about the best way to improve them. Every year we update our taxation law to make sure that the system remains transparent and efficient. We may also choose to give certain tax breaks to specific sectors of the economy that need the extra help, or we may choose to remove these privileges if it’s time to do so.
Second, as I already told you, we think of how to improve the tax collection system. There are five core areas that we seek to improve: the taxpayer service, the tax filing system, the auditing system, the collection and appealing process, and, finally, our human capital. We are focusing on the introduction of advanced technology to achieve these reforms.