Cambodia Microfinance Association (CMA) yesterday said it has taken steps to fulfil its tax obligations to the government.
“The Microfinance sector has paid attention to its obligation to pay taxes to the government although it hadn’t been doing so 100 percent in the past, said, Kea Borann, CMA chairman, while speaking to reporters after a workshop on taxes related to microfinance in Cambodia.
“There are some misunderstandings and technical problems when it comes to paying taxes and that has led to a failure in fulfilling all tax obligations but this doesn’t mean we can escape,” he said, adding that the association has often conducted workshops on tax obligations.
The association now has a total of 103 members, including rural credit institutions and leasing companies.
The MFI sector provided $7 billion in credit to 2.2 million Cambodians, while 2.7 million people deposited a total of $3.6 billion, CMA’s data shows.
“Every year, we hire independent auditors to conduct an audit on microfinance business operations, so I can say the microfinance sector is trying its best to carry out tax obligations,” Kea said.
Vann Puthipol, deputy director general of the General Department of Taxation (GDT), said the MFI sector has played an important role in contributing to the country’s economic growth.
Vann, however, failed to disclose how much that the GDT has collected from the sector, only noting that it is a big portion of tax revenue.
Cambodia collected more than U$2.819 billion in tax revenue for the whole of 2019, up 23.2 percent of the annual target, according to figures from the Ministry of Economy and Finance.
During the workshop, the GDT also presented the updated directives on deductible expenses for annual income tax.
Last month, the ministry of Economy and Finance issued Prakas (Directive) No 098 on Tax on Income, which applies to self-declaration by taxpayers, with the exception of small-scale taxpayers who have to comply with separate provisions.
The Prakas includes new provisions and amendments pertaining to withholding tax, one of which says payment in cash or kind for a supply of a service worth less than 50,000 riels ($12.50) is no longer subject to withholding tax.