Cambodia: SMEs urged to comply with tax changes

• May 23, 2017

The majority of small and medium enterprises are still unaware of how to comply with new tax regulations that came into force at the end of last year, according to an Economy Ministry official. 

Srun Angkaren, a deputy director in the general department of taxation, said officials are organising training to help SMEs comply with the “real tax” regime. The government began abolishing the old estimated regime for tax payments in 2015. All businesses with more than $125,000 a year in turnover were to register to be taxed under the more rigorous real regime by the end of last year.

A two-year income tax exemption for SMEs that registered with the ministry will last until the end of 2018, Mr Angkaren said, which makes training vital between now and then. 

“All SMEs must understand and obey tax laws to boost income, reduce corruption and maintain transparency,” he said during a workshop on the issue.   

“We will collaborate with the Federation of Associations of Small and Medium Enterprises of Cambodia [FASMEC] and Transparency International to conduct training on taxation for all SMEs.”   

Mr Angkaren told representatives of about 100 companies there are large numbers of SMEs in Cambodia, however income collected from SMEs contributes to only 15 percent of total tax collection. 

“We don’t want to punish SMEs, but we will try and educate them to understand their obligations. They have two years to register, and if they are still outside of the law after that we will take action against them,” Mr Angkaren said. 

FASMEC president Te Taing Por said comprehension of the new tax system is still limited since it is fairly new. 

But he said all SMEs must understand tax law in order for businesses to compete on a level playing field. 

“Currently about 39,000 of 530,000 SMEs have registered with the government, so we have to push forward,” Mr Taing Por said. 

Pech Pisey, programme director at Transparency International, said transparent procurement and tax procedures will mean better services for SMEs and reduced corruption. 

He said effective businesses must have clear and open production chains.

“The implementation of transparent procurement in businesses will help businesses gain more income,” Mr Pisey said.   

Source: http://www.khmertimeskh.com/news/38595/smes-urged-to-comply-with-tax-changes/