Thailand
Cambodia: Default credit operators draw tax authority’s ire
The General Department of Taxation (GDT) has sought cooperation from the National Bank of Cambodia (NBC) to take legal actions against the two firms that have been operating as credit operators without registration with the tax administration after the central bank issued a letter of warning late last week, a release by GDT said.
GDT has noticed that Happy Loan Cambodia Co Ltd has been registered with the tax administration with Valued Added Tax number 104005106, but the company’s information has not been updated and filed and tax payments, while Tiger Loan has not fulfilled its obligations to pay taxes.
“The two enterprises have been operating as credit operators, providing loans and promoting their services through social media without fulfilling tax obligations and updating enterprise information,” the release pointed out. The move follows to strengthen the compliance of the laws on taxation and on banking and financial institutions.
“Also, it is to promote business environment and assure competitive equity, especially the high efficiency and effectiveness of the law enforcement,” it indicated, adding that GDT requested that NBC Governor review and push the two firms to comply with the applicable tax law.
The GDT letter requesting cooperation from NBC was issued 11 days after the monetary authority released a statement warning to take legal actions against illegal lenders.
NBC along with other competent authorities are considering taking legal action against firms or individuals operating businesses that go against the banking laws and financial institutions of the Kingdom.
Happy Loan Cambodia and Tiger Loan have promoted loans from $50 up to $500 to customers within an hour under two options of periods—7 days or 14 days—by the easy requirement of a national identity card without collaterals, according to their posts on Facebook.
“Our company provides small- and medium-scale loans with fast consultation. You will get the loan in an hour. Simple documents like an identity card for people who have businesses,” said the post of Happy Loan Cambodia, adding that people who are interested in borrowing money from the company need to register their names in a website link it displays on the post.
Chan Veasna, Managing Director of local tax consulting agency APV Cambodia, told Khmer Times yesterday that Happy Loan Cambodia needs to be updated by tax officials if it is a company that was registered with the GDT a long time ago, but if it has been registered recently with the Ministry of Commerce (MoC) and GDT after the procedures are completed.
“If they have not to do filing, they are wrong and fines/penalties will depend on their level of compliance. Officials will measure fines/penalties based on the compliance that the company did not respect such as what taxes they failed to pay monthly, annually or patent tax,” Veasna said.
Veasna added that Tiger Loan will also face fines/penalties most likely more heavily as its owners have not registered the company with MoC and GDT as Cambodia’s laws require that businesses need to be registered with the government system as per law requirements. “If they do not register their businesses, it means the businesses are illegal and they stay out of the system,” he said.
According to Veasna, the owners of the companies would not be able to escape their responsibilities if they are Cambodians, but if they are foreigners who live out of Cambodia, they should come to settle the tax payment as they make national revenue lost through their business activities without paying taxes.
“We have seen some cases of foreigners who did not pay taxes [went back to their countries], but we do not want such investors who do businesses without respecting laws, paying taxes and then escape responsibilities, which is a form of unequal competition as others do businesses with paying taxes and respecting laws,” Veasna said.
NBC indicated that some unscrupulous individuals and companies have promoted and provided loans to consumers through various means like online systems, leaflets, brochures and posters at public places without licenses are against enacted laws, especially the Law on Banking and Financial Institutions.
“Therefore, to avoid frauds by any means or consequences caused by receiving informal loans and to maintain stability and trust of the public on the banking system, the central bank requests that the public to be careful to consume formally licensed institutions only,” the statement pointed out.
Source: https://www.khmertimeskh.com/501145308/default-credit-operators-draw-tax-authoritys-ire/