Cambodia: Use of tax e-filing system mandated from March onwards

• Feb 24, 2021

All taxpayers in the self-assessment tax bracket have been instructed to submit their annual income tax via electronic filing (ToI E-Filing) from next month on, according to an announcement by the General Department of Taxation (GDT).

The instruction for ToI E-Filing letter number 3140, was signed by Kong Vibol, minister attached to prime minister, who is also the GDT’s director-general.

The GDT informed directors, managers and owners of companies, enterprises and nongovernmental organisations of the launch of the electronic filing system (E-Filing System) via a Ministry of Economy and Finance announcement released on Feb 27, 2020.  It developed the ToI E-Filing system to facilitate the declaration and payment of annual income tax returns in order to strengthen the tax services’ effectiveness, efficiency, transparency and make filing quick, easy and cheaper. The announcement added that companies, enterprises and nongovernmental organisations defined as medium and large must declare their annual income tax by using the ToI E-Filing within three months of each year-end.

The Ministry of Economy and Finance said medium taxpayers are defined as enterprises or companies with a turnover from 700 million riels to 4 billion riels. Large taxpayers are defined by a turnover in excess of 4 billion riels.

It added those who already hold user accounts and use the E-Filing System for their monthly tax payments do not need to register again. They can use their existing accounts to use the E-Filing system.

Taxpayers defined as small (under 700,00 riels in turnover) can submit the declaration for annual tax payment by using the GDT Tax Prefiling app within three months of each year-end. Small taxpayers s that have yet to file a tax declaration letter via the mobile app can do so manually and submit the declaration to a tax office.

GDT’s director-general Vibol is confident that directors, managers and owners of companies, enterprises and nongovernmental organisations will implement the instruction to use the ToI E-Filing system and declare their taxes and pay them effectively.

Vibol added that e-filing is good for facilitating the workflow of a company and saves time as staff will no longer need to go to the tax office or bank because the system includes an e-payment facility that eight commercial banks are cooperating with in association with the tax department.

Vibol noted that medium and large taxpayers are required to use the e-filing system and, if they do not fully understand it, that they can seek more information from the taxation department or submit a letter to the taxation department for verification and training assistance.

Anthony Galliano, group chief executive officer of Cambodian Investment Management Holding, said that e-filing is the one of the most impactful technological advances that the General Department of Taxation has achieved to date.

He added it has transformed both tax preparation and filing from manual and low productivity processing into the digital age. Galliano said the positive significance should not be underestimated.  On a pure environmental level, not so long ago, tax filings had to be delivered and accepted at the tax branch and payments with long waiting times.

He said: “E-filing has disposed of all the travelling back and forth, reducing traffic and carbon emissions and also substantially increasing productivity.”

“The system has been proven to deliver increased productivity through its automated processing, integration of data submission with payment of taxes and an error preventive format with calculation features,” he said. He added though that in his opinion there are still areas for improvement that could create even greater value for taxpayers.  Galliano noted that presently the template to upload data is too rigid to integrate with accounting systems such as Xero and QuickBooks, so there is still a degree of manual processing.  He added that limiting one user per company for the $100 fee, constrains companies’ processing options. He also pointed out that the free browser version can be slow at times and has limited upload capabilities and that while the e-filing system has substantially limited physical interaction for tax filings, there are occasions, such as refiling, where a tax office visit may be required.

Galliano added the GDT itself is probably the greatest benefactor because data uploads from taxpayers eliminate keying of data, physical logging of forms and free-up the significant number of staff that process, file and review taxpayer in-person submissions.

Source: https://www.khmertimeskh.com/50817426/use-of-tax-e-filing-system-mandated-from-march-onwards/