Strong message on tax collection

Strong message on tax collection

Kong Vibol, the director-general of the General Department of Taxation (GDT), has called on companies across the Kingdom to comply with the nation’s laws and regulations and fulfill their tax obligations.

The director-general introduced this year’s tax goals and the progress of tax administration reform via a live broadcast on the GDT Facebook page.

He pointed out that while under the impact of the pandemic, Cambodia’s economic growth rate contracted by 1.9 percent last year, which had a significant impact on national tax revenues.

He also disclosed that this year’s 2021 GDT tax target will be approximately 65 percent (approximately $1.8 billion) of last year’s tax collection.

Vibol emphasised that the GDT will implement its tax laws more strictly this year and carry out tax administration and tax collection work under the national tax-mobilisation strategy.

“We have the support of Prime Minister Hun Sen to carry out our tasks. I call on all companies to cooperate and participate in the promotion of national development,” he said.

According to a report from the GDT, last year total tax revenues reached $2.889 billion, which exceeded the original target by 1.36 percent and represented a year-on-year increase of 3.73 percent.

He noted that in the ASEAN region, Cambodia is the only country that exceeded its taxation targets despite the pandemic.

Cambodia’s “excess” tax revenue last year was the result of a significant increase in taxes on corporate profits achieved in 2019 (which were accounted for in March 2020 tax totals).

From the second half of 2020, he noted however that almost every month’s total tax income fell short of its target with taxes for the back end of 2020 reaching only 75 percent of GDT expectations.

The general director emphasised that under the implementation of several tax administrative reforms, including the development of an automated electronic tax filing system, it is now more convenient and faster for enterprises to declare and pay their taxes. He added that enterprises have also continuously improved their awareness of taxation compliance and that the number of new enterprises has increased.

“In addition to making the filing and paying of taxes more convenient, we have also closed many of the ‘loopholes’ that lead to tax avoidance and evasion,” he said.

To ensure that the government has the fiscal capacity to deal with the pandemic this year, the Ministry of Finance and Economy has instructed the GDT to strengthen taxation in “new areas”, including the gaming industry, e-commerce, oil and minerals.

The Ministry of Finance also requires the GDT to effectively implement the medium-term tax mobilisation strategy (2018-2023) to ensure the government’s financial stability and sustainability. Khmer Times