Cambodia’s tax system is undergoing a huge overhaul as the country gears up for the launch of the ASEAN Economic Community (AEC 2015), the head of the General Department of Taxation (GDT) revealed.
H. E. Kong Vibol, Director General of the GD, told a gathering of businessmen and women at EuroCham’s latest luncheon that preparations are well under way to overhaul many aspects of Cambodia’s current tax system in a bid to clamp down on tax evaders as well as improve the services GDT offers.
To bring the country in line with expected standards for ASEAN members, the Government has drawn up a five-year plan, which has been submitted to the Ministry of Economics and Finance, who have given it the go-ahead.
It will now be submitted to the Cabinet for final approval before being implemented.
“We have a lot of work to do before 2015,” he says. “Reform has a lot of impact on people and business and we need to remember this. By 2015, we are preparing to strengthen our tax collection and this is the most important priority for the Government.”
In the strategy, Prime Minister Hun Sen outlines a series of priorities, including a payrise for public servants and increasing spending on education, the health service and infrastructure.
It is hoped this will be funded by the extra revenue raked in once the tax reforms take place.
As part of the master plan, Cambodia has set itself a target that between 2013 and 2015, the amount of tax, customs revenue and general tax should, combined, be 0.5 per cent of the country’s GDP.
On track to hit its aim of increasing the amount of tax collected by 16 per cent before the end of the year. If successful, a total of 70 per cent of total taxes will have been collected.
As well as looking at measures to put in place systems and data centres to enable agencies to cross reference information, making it easier to track down tax dodgers, the Government is mooting plans to introduce a computer system to speed up processes as well as potentially rehauling the tax brackets.
And it has pledged to strengthen the implementation of excise tax, especially on alcohol and tobacco, and start talks on the subject of life insurance tax.
Mr Kong added that plans are also underway to improve the VAT system so those who have overpaid in VAT can get refunds much easier, as well as make it more accurate for the ministry to collect the correct taxes.
He said consultations had and will continue to take place with the private sector on the issue.
The presentation took place as part of EuroCham’s monthly series of luncheons that feature expert speakers in various areas.
For more information, visit www.eurocham-cambodia.org