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Property taxes start in January

Phnom Penh’s skyline. Cambodia’s new property tax will start being collected from January next year, say government officials. Photo by: Sovan Philong
Cambodia’s new national property tax would be implemented from January
next year, boosting the federal coffers up to an estimated US$4
million, officials said on Sunday.

The real estate division at
the Ministry of Economy and Finance was granted approval on Friday to
establish a committee for property evaluation, Norng Piseth, the Real
Estate Division chief, told The Post.

“We have
prepared the prakas to establish a committee for property evaluation
and we will start implementing tax collection on property from early
2011 next year, as the National Assembly requires,” he said.

The
National Assembly passed the law for a tax on all real estate,
including land, houses, apartments and other infrastructure constructed
on that land, in November 2009.

According to the Prakas – or
edict Number 493 – the property tax will be an annual payment
calculated as 0.1 percent of the value of the property as estimated by
the evaluation committee, based on market prices. Only those properties
worth 100 million riel (US$25, 000) or more will be taxed.

Norng Piseth said the tax would bring more income for the government to further development.

“This tax is very important in order to increase the national income to develop the country,” he said.

The
new levy is expected to raise between $3 million to $4 million in
additional revenue, according to the Ministry of Economy and Finance
estimates.

Touch Samnang, project manager and architecture of
the Diamond Island development project behind developer Overseas
Cambodia Investment Corp, said Sunday that he supported the tax on
property, but also called for fairness.

“I think that we should
have this tax in order to increase the economic growth in Cambodia. So,
it is not a problem for us. We’re really [in] support [of] and follow
what the government requires,” he said, adding that the government
should ensure transparency, including that all eligible property owners
and housing developers did pay up.

Cheap Sareth, a land owner in
Dangkor district, Phnom Penh, said Sunday he felt that it was too early
for the government to begin collect property taxes.

“In my
point of view, I think the government is moving too early to collect
tax on property while the country is still recovering from the global
economic crisis,” he said.

The International Monetary Fund
said in its yearly assessment on Cambodia for 2010 that long-term
fiscal stability for the Kingdom required further improving revenue
administration.

“Gains in tax collection offer the best hope
for Cambodia to meet the dual objective of securing fiscal
sustainability and mobilising resources for its development needs,” the
fund said in a release on its findings.

Keat Chhon, MEF deputy
prime minister said during National Assembly discussions on the
property tax last year that the new tax was not only contributing to
the national budget, but was helping establish a “tax culture”.

“We
do not expect much income from this new law, but we are making this law
as we also want to establish a tax culture which will facilitate us to
collect tax directly in the future,” he said.

At the time, he said about 180,000 households would fall under the requirements to pay the new tax.

MEF deputy prime minister could not be contacted for comment on Sunday.

Phnom Penh Post
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Categories: Local News
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