The tax department has frozen all bank accounts linked to NGOs established by the founder of the Cambodia Daily newspaper Bernard Krisher.
Mr Krisher set up World Assistance for Cambodia and Japan Relief for Cambodia in 1993, dedicated to providing opportunities for young people and the rural poor in Cambodia.
According to Douglas Steele, country director at World Assistance for Cambodia and former general manager at the Cambodia Daily, the NGOs had to suspend their work as of yesterday, while 100 staff have been told not to come to work.
“There was no prior communication from the General Department of Taxation before it acted. The tax department’s action puts Cambodia in breach of its Memorandums of Understanding with World Assistance for Cambodia and Japan Relief for Cambodia, as it prevents us from carrying out our work under the agreement,” a statement from the NGOs said.
“Effective Monday, we will suspend most of our operations including school construction and providing English teachers in approximately 90 rural schools. This will affect computer and English classes for several thousand students.
“With the cash we have on hand, we can only support essential operations of our foster care centre which serves 40 children. We have enough cash to operate the centre for about one month. We will furlough all staff other than those necessary to operate the foster care centre. The furlough will affect about 100 out of 120 staff.”
The statement said most of the organisations’ funding comes from tax-deductible donations from the United States, Japan, Australia and United Kingdom, adding that money was not currently under threat.
“Almost all of our funds are safeguarded in accounts outside of Cambodia as funds are wired in as expenses are incurred,” it said.
“No donor funds are at risk now but it will impede our ability to operate until or unless the General Department of Taxation unfreezes our accounts. We will communicate with the embassies of the donor countries to provide status reports on the funds.”
Deborah Krisher Steele, who owns the firm behind the now shuttered Cambodia Daily newspaper, said via email that children and NGO staff were suffering as a result of the bank account suspensions.
“There is only a little money in the bank because we send money in from overseas when expenses are incurred. At the moment, we can’t wire the funds in to pay our staff nor pay for food for the 40 foster children who live at our foster care centre,” she said.
Kong Vibol, director general at the General Department of Taxation, declined to comment.
The Cambodia Daily ceased operation after 24 years on September 4, the deadline the tax department set to pay about $6 million in back taxes.
The paper claimed the government was attacking free press by issuing the arbitrary tax bill and giving it a 30-day deadline to pay up or face assets seizure and closure.