The General Department of Taxation (GDT) on Friday reacted to a letter from the US ambassador in which he announced his government was suspending assistance to the tax body due to recent actions by the department described as politically motivated.
On March 1, William A. Heidt, US Ambassador to Cambodia, wrote a letter to Kong Vibol, director-general of GDT, announcing the suspension and the downsizing of several assistance programs operated by the US government, including efforts to digitalise GDT, as a result of recent setbacks to democracy in the kingdom.
“The United States appreciates the positive impact of GDT reforms on Cambodia’s economy. However, there is strong concern about the recent GDT actions directed at specific individuals and entities in Cambodia that appeared to be politically motivated,” Mr Heidt said.
“As a result, the United States government has suspended capacity building support to the GDT and its officials.”
In 2009, the US Department of Treasury, through its Office of Technical Assistance (OTA), initiated a programme to modernise GDT.
However, according to Mr Vibol, the assistance programme actually ended in December 2016. In his reply to the ambassador’s letter, he asked how is it possible to end a programme that has already concluded over a year ago.
Mr Vibol wrote, “I find it confusing and hard to understand why Your Excellency informs me now that the US government is suspending their assistance programme to GDT because of politically motivated actions.
“My question is: How can your government suspend a non-existent assistance programme?” Mr Vibol asked.
He explained that as a token of their appreciation, the Cambodia government awarded the OTA team the Royal Order of Sahametrei upon completion of the project.
Mr Vibol defended its department against accusations of using taxes as a political tool against certain individuals and organisations.
“GDT is a tax administrator and like any other tax administrator around the world, its job is to ensure all taxpayers are complying with the Law of Taxation of the Kingdom of Cambodia,” he said.
“The Cambodia Daily case was purely and strictly a matter of non-tax compliance which, by law, was classified as a tax evasion and which should have never been taken out of proportion in the first place and associated with politics.
“I personally and professionally feel that Your Excellency Ambassador has provided biased and misleading information to the State Department and the US government about the situation in Cambodia, particular with regards to GDT and OTA’s mission.
“This information resulted in an incorrect and imbalanced picture of the situation on the ground by the White House and also in media circulations which falsely say GDT uses taxes as a tool to further a political agenda.
“We request that Your Excellency first try to learn and understand the full nature of any issue or story in Cambodia (taking all sides of the story into serious consideration) before reporting to your government. Failing to do so always results in some huge misunderstanding between our governments, which ultimately and unnecessarily affects our strong relationship,” Mr Vibol said.
According to a statement from the White House released on February 27, over the past 25 years, the US has been a committed development partner and contributed over $1 billion to improving Cambodia’s economic, social, and democratic wellbeing.
Recent setbacks to democracy in Cambodia, however, caused deep concern in the US government, including Senate elections on February 25, which the statement said failed to represent the genuine will of the Cambodian people.
“These setbacks compelled the United States to review its assistance to Cambodia to ensure that American taxpayer funds are not being used to support anti-democratic behavior,” the statement read.
“Based on this review, the United States Government will suspend or curtail several Treasury, USAID, and American military assistance programs intended to support the General Department of Taxation, the capacity of local government authorities, and the Cambodian military, each of which has been linked to these setbacks.”