Cambodia Investment Review
In a move that underscores the commitment to fostering improved relations between Cambodia’s public and private sectors, the General Department of Taxation (GDT) of the Ministry of Economy and Finance recently convened with prominent representatives from the European Chamber of Commerce in Cambodia (EuroCham) and the American Chamber of Commerce in Cambodia (AmCham) on 5th October 2023.
Read more: GDT Sets $4.16B Tax Revenue Target for 2024
According to meeting minutes seen by Cambodia Investment Review, the dialogue, conducted at the General Department of Taxation, saw active participation from key industry figures. HE. Kong Vibol, Minister Attached to the Prime Minister and the Delegate of the Royal Government as the General Director of the GDT, spearheaded the discussions alongside Mr Tassilo Brinzer, Chairman of EuroCham, and Mr Devin Barta, President of AmCham.
Critical Issues Addressed By The GDT
Among the critical issues addressed during this pivotal meeting were:
- Tax Auditor Bonus
- Mounting interest on reassessments
- Complexities surrounding tax incentives
- Often-labyrinthine process of audit report approvals
- Best practices for voluntary disclosure
- Clarity on timeframes for the rollout of new legal provisions
- Growing apprehensions related to stamp duty on share capital increase
Opening the dialogue, HE. Kong Vibol emphasized the paramount importance of open communication, especially in the realm of taxation. He acknowledged the contributions of the private sector and hailed the positive impact of the reforms initiated by the GDT. The Minister went on to underline the collaborative role both the Royal Government of Cambodia (RGC) and the private sector have in steering Cambodia’s economic future. Vibol remarked, “The importance of a direct and unambiguous dialogue cannot be overstated. Together, we can and will shape a taxation framework that is robust, fair, and conducive to Cambodia’s economic aspirations.”
A particular area of concern that resonated deeply during the deliberations was the perceived unpredictability of the taxation landscape. The private sector’s feedback indicated that an estimated 20% of taxpayers felt that their previous interactions with tax auditing lacked transparency and predictability. This sentiment was exacerbated by the challenge of unclear auditing methodologies and the constraints faced by taxpayers. Some, due to budgetary limitations, had to depend on third-party entities for producing the necessary documentation, further complicating the auditing process.
Reacting to these concerns, HE. Kong Vibol said, “We recognize these challenges and are fully committed to working closely with all stakeholders to ensure a more streamlined, transparent, and effective taxation process. The insights provided today will be instrumental in helping the GDT adapt and evolve.”
Need To Minimize Bureaucratic Red Tape
A notable outcome from the meeting was the GDT’s acknowledgment of the pressing need to minimize bureaucratic red tape and pivot towards a more digitalized approach. This recognition came on the heels of discussions that highlighted the importance of transparency in the auditing process. Both the GDT and private sector representatives stressed the significance of establishing clearer methodologies, especially as some businesses, due to budgetary constraints, had to rely on third-party documentation sources.
The meeting ended with stakeholders from both sides emphasizing the invaluable role of consistent dialogue, collaborative problem-solving, and the necessity of a fortified, resilient, and adaptable taxation framework for Cambodia.
This dialogue signifies a positive stride towards reinforcing bridges of communication between Cambodia’s taxation authorities and its vibrant private sector. With mutual respect, shared goals, and a collective vision for a sturdy and equitable taxation landscape, the future seems promising. Such collaborative efforts, if continued, have the potential to carve out an environment that is not just business-friendly but also conducive to achieving Cambodia’s economic potential.
