Tax Bill Puts Nail In Newspaper’s Coffin

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The independent English-language newspaper The Cambodia Daily officially ceased publication today after 24 years. The closure comes after the government slapped the media outlet with a bill for around $6 million in back taxes.

cambodia daily closure tax bill
The Cambodia Daily says it is a victim of a government campaign to destroy free press in the country. KHMER TIMES / MAI VIREAK

“The power to tax is the power to destroy. And after 24 years, one month and 15 days, the Cambodian government has destroyed The Cambodia Daily, a special and singular part Cambodia’s free press,” the paper’s statement on the closure said. “As a result of extra-legal threats by the government to close the Daily, freeze its accounts and prosecute the new owner for the actions of the previous owner, The Bernard Krisher Jimusho Co. is unable to operate The Cambodia Daily newspaper and it will cease publication as of September, 4.”

The firm behind the paper, owned by Deborah Krisher-Steele, purchased the assets of The Cambodia Daily in April from her father and the paper’s founder Bernard Krisher. It will now revert the assets to Krisher and seek dissolution. Krisher insists the way he operated The Cambodia Daily was lawful and has invited the government to prosecute him if it believes otherwise. If charged, Krisher vowed to return to Cambodia.

“There may well be a legitimate dispute between the tax department and the owners of the Daily over when tax became collectable and in what amount,” the statement went on. “In an ordinary process, matters in dispute would be resolved after an audit and private negotiations. Instead, the Daily has been targeted with an astronomical tax assessment, leaks and false statements by the tax department and public vilification by the head of government before an audit, much less a legal proceeding.”

The statement added that evidence to refute the allegations against the paper are in the purchasing records of every government ministry and every embassy in the capital. “The Daily can match every dollar of tax collected with tax paid since Ms Krisher-Steel’s company was established,” it said.

“For the tax department’s allegation that the Daily pocketed VAT for many years to be true, there should be thousands of old invoices around the city showing whether it collected VAT. If they existed, the tax department would have leaked them to Fresh News already. Money not collected cannot be stolen.”

The statement said the allegations of theft against the paper were unfounded and defamatory, while the campaign of leaks was unprofessional and unlawful. “On Monday, The Daily’s service to the Cambodian people will end. We want to thank our advertisers and subscribers who supported freedom of the press for so long, and our staff who have fought fiercely and courageously to report All the News Without Fear or Favour,” it said.

Prime Minister Hun Sen yesterday remained defiant on the issue. Speaking to thousands workers at the Koh Pich conference centre, he denied blocking press freedom.

“The Cambodia Daily has run its business without paying tax and owes about $6.5 million for the ten years years since 2007. When we demanded they pay tax, they say we are harming press freedom,” said Hun Sen. “They came to teach us about transparency but haven’t paid tax. So we ask them to leave the country if they say we are dictators.”

Chhorn Chansy, news editor at The Cambodia Daily, said he was devastated at the closure of the paper after 24 years. “All of the staff were very unhappy when the publisher announced that our  newspaper has been pushed into a corner and forced to close,” said Chansy, adding that another official letter on the situation will be issued by the tax department today. “The Daily has published so many important stories since it began operating in 1993.”

Chansy said Khmer staff of the paper will be in high demand for work elsewhere, so should be able to continue supporting their families. What will happen to the foreign staff is less clear.

George Wright has worked as an associate editor at The Daily for four years. “I still don’t think I’ve fully processed yet that the Daily has ended. Old school, no nonsense, truly independent newspapers like the Daily are a dying breed and I think our reporting will be missed by many,” he said. “I really feel for the Khmer staff who have kids. I know a lot of them are anxious about the immediate future, but they’re so talented I’m sure they will land on their feet. It really is a sad end of an era. I’m so grateful to have been given the opportunity to cut my teeth at one of – if not the best – independent newspaper in the region.”

Kevin Doyle, former editor-in-chief of the paper, gave Wright his job. “He told us governments can shut newsrooms, but it is much harder to silence journalists,” added Wright.

General Department of Taxation director general  Kong Vibol told government-aligned Fresh News that the paper will have to pay its debt despite its closure. “We still have to implement the tax law. Whoever is responsible from the media outlet cannot evade the debt or escape the country,” he said. “If there is no money to pay, then the company’s assets will be seized in line with tax laws.”

Chak Sopheap, executive director at the Cambodia Centre for Human Rights, said press freedom is an essential element of any democratic society. “It is crucial in order to inform the public of information they are entitled to know, and to hold government and corporate actors to account. Cambodian people have the right to access information, enabling informed political debate to take place,” she said.

Sopheap noted that The Cambodia Daily is a hugely important institution in the Kingdom and must be saved. “The Daily’s fearless reporting has provided a beacon of hope to individuals and communities that have been trampled upon by Cambodia’s harsh model of crony capitalism – helping to amplify the voice of the poor and disenfranchised,” she said.

“The government should be grateful for the service provided by the Daily, which has shone a light on corruption and failures of government in Cambodia for years, helping to create a better-functioning, more democratic society. These are dark and troubling times for the people of Cambodia, signalling a huge setback of democracy. The Cambodian government must reverse its current course or the façade of democracy will fall away entirely.”

Sebastian Strangio, a journalist focusing on South Asia and the author of the book Hun Sen’s Cambodia, said the attack on the Daily was intended to shore up the ruling CPP ahead of next year’s elections. “This is clearly geared toward ensuring victory for the CPP at the 2018 election. It is also part of a long-standing ambition to wind back the freedoms of the UNTAC period, which opened up a space for independent NGOs and media in Cambodia,” he said.

“The government has always seen the independent media, NGOs, and the opposition parties to be working together to overthrow the CPP. For years the government has tried to win back these freedoms. Now that Mr Hun Sen has strong backing from China, and is no longer dependent on Western aid, he is in a position to begin going after old enemies whose existence he has only ever tolerated. The CPP government is sending the message to journalists and editors that there are certain topics that can land them in court. This will encourage self-censorship.”

Information Minister Khieu Kanharith meanwhile ordered Beehive radio station FM 105 and Women’s Radio FM 102 to halt their operations rebroadcasting Radio Free Asia and Voice of America. “Radio Free Asia and Voice of America have not yet legally registered their offices at the Ministry of Information,” he said yesterday. He added the stations would be in breach of the law if they do not follow the order to stop the rebroadcasts.

The government has in the past few weeks attacked the Cambodia Daily newspaper over unpaid taxes, kicked the National Democratic Institute out of the country and shut down multiple radio stations renting airtime to Radio Free Asia and Voice of America.

This article was originally published in the Khmer Times.

Do you think the tax bill for The Cambodia Daily was fair?