The government is considering imposing taxes on companies’ digital revenue as a way of increasing public coffers by capitalising on the rapidly expanding digital commerce sector.
Plans to establish a so-called ‘e-tax’ are in line with the government’s strategy to prepare for the fourth industrial revolution, said Aun Pornmonirath, Deputy Prime Minister and Minister of Economy and Finance.
“In response to the latest trends and technologies, the government decided to set up a policy and regulations following the lead of other countries around the world.
“Our goal is to seize opportunities for revenue growth presented by the swift expansion of our digital market, boost the development of tech startups, manage e-commerce platforms efficiently and reduce risks that may arise as a result of internet technologies,” Mr Pornmonirath said.
He said the development of e-commerce in the Kingdom has been fast, and that Cambodians have been, for the most part, able to adopt and adapt to the technologies and changes in lifestyle brought about by the advent of the digital economy.
“However, we have not set up a mechanism to collect taxes from electronic business yet. We are now discussing the issue at the national, regional and global levels,” he said.
Such mechanisms are now in the first stage of development, he said, with the government aware that regulation in the sector is important to aid its development and to come in line with international standards.
In addition to taxing digital revenues, the government is also working on creating an efficient system to manage tax collection, as well as building the soft and hard infrastructure needed to support a digital economy, and training professionals so that they acquire the skills demanded in domestic and international markets, Mr Pornmonirath said.
Leakhena Long, co-founder and chief operations officer at Joonaak, a local tech startup, told Khmer Times that the government’s plan to tax digital activities will have both negative and positive repercussions.
On the one hand, it may discourage young people from starting their own tech enterprises. This can be avoided, she said, by creating incentives, such as implementing a tax moratorium for young people that decide to form their own company.
“On the other hand, having more regulation in the sector is a good thing. More unregistered businesses will join the regulatory fold, which can only boost the sector,” Ms Leakhna said.