Private Sector Urges Tax Reforms

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Small and medium enterprises are urging the government to consider a tax reduction for local products. Supplied

The Kingdom’s private sector is urging the government to reform taxation law in order to help medium and small enterprises reduce operating expenses besides curtailing businesses that do not follow the taxation law.
In a first of its kind meeting held yesterday between private sector entrepreneurs and officials of the General Department of Taxation under the Ministry of Economy and Finance, representatives of several small and medium  enterprises, including hotels, banks and financial companies called upon the ministry to amend some sections of the taxation law  that, they claimed, were not fair and beneficial for tax payers.
The collaborative meeting between the General Department of Taxation (GDT) and the Cambodia Chamber of Commerce of the GDT-Private Sector Partnership Mechanism took place at a time when the GDT finished 80 percent of the new tax law draft and planned to submit to the  Ministry of Economy and Finance soon.
The plea was made by entrepreneurs following a rise in their business operations in Cambodia. They pointed that the taxation law guidelines should be made clearer for a better understanding of the law.
The issues raised by private sector representatives included registration tax, practicality of taxation law guidelines, reduction of tax on some products and services, private sector participation in discussion on the new taxation law and reform of tax rate.
Sok Piseth, president of Youth Entrepreneurs Association of Cambodia, said that the GDT should use its good offices to make  listed and non-listed businesses in the country more competitive by giving a fair treatment in respect of tax collection.
Mr. Piseth further said that members of his association had requested  the GDT to publicize practical guidelines of taxation so businessmen could understand the complicated taxation law. The guidelines would help tax payers comply with the tax law effectively.
Hout Ieng Tong, President of Cambodia’s Microfinance Association and Keo Mom, president of the Cambodia Women Entrepreneurs Association, shared the same views. They asked the GDT to consider reducing tax rates on products produced by small and medium enterprises.
Kith Meng, president of the Cambodia Chamber of Commerce, said that in the Asean framework, competitiveness was not dependent on transportation costs or export and import procedures but on the tax rates.
He urged the ministry to reduce tax rates in Cambodia in line with neighboring countries.
Kong Vibol, director general of GDT, said that the tax issues voiced by the private sector was important for taxation law because the private sector was one of the main drivers of the country’s economy.
“I understand taxation is a big issue. But if we lay our focus only on the tax rate and don’t do anything towards better coordination and collection of taxes, it doesn’t work,” Mr. Vibol said.
With respect to tax reforms, Mr. Vibol said that the taxation law had not been reformed since 1994. “We have reformed some small sections of the taxation law as whenever the need arose.”
Arnaud Darc, chairman of European Chamber of Commerce of Cambodia (EuroCham), said that if Cambodia’s taxation system was reformed it would significantly improve the business environment.
If the new reforms were made, the GDT’s performance in respect of tax collection and providing service to tax payers could  see a remarkable improvement, Mr. Vibol said. He felt that the GDT would do well if some of its poor-performing personnel were relocated.

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