Cambodia: Gambling businesses urged to abide by tax obligations

The General Department of Taxation (GDT) of the Ministry of Economy and Finance (MEF) has warned owners of commercial gambling businesses to fulfill tax obligations failing which legal action shall be initiated against them, said a statement.

MEF Minister Aun Pornmoniroth approved last Wednesday that the internal tax authority GDT would provide tax incentives and understanding of no fines or penalties such as additional tax charges and interest for late payments for commercial gambling business owners who appear to file tax returns and pay taxes on a voluntary basis for their non-commercial gambling transactions.

However, these incentives and understanding were provided for cases of mistaken failure in filing tax returns and paying taxes only and the approval would be valid from the date of the statement of notification was signed and issued until the end of March 2023. The statement was signed by GDT Director General Kong Vibol on last Thursday—a day after Pornmoniroth approved the incentives and understanding.

“In case that you still do not fulfill your obligations to file tax returns and make payment of taxes to the tax administration as per the determined deadline, you shall be considered committing obstacles in the implementation of tax regulations and thus you shall be penalised set in applicable laws and regulations regarding taxation,” the statement pointed out.

Also, the statement said that owners of commercial gambling businesses are required to fulfill their tax obligations on commercial gambling business transactions from December 30, 2022, onward, but they have to file tax returns and payments for non-commercial gambling transactions from the transaction starting date according to the laws and regulations on taxes.

“Previously, it is noticed that some business owners have not fulfill their obligations of filing tax returns and payments yet, while some have already done. In this regard, you are warned that failure to fulfill tax obligations properly will cause you to be penalised as per applicable laws and regulations on taxations,” the statement pointed out.

Khun Darith, Managing Partner of audit, accounting and tax solutions at accountancy and auditing firm K Professional Accountants (KPA), told Khmer Times yesterday that GDT now requires that they have to do so for non-commercial gambling transactions on a voluntary basis with incentives, which is good for both the government and the operators who would need to face fines or penalties.

Darith said non-commercial gambling transactions may include hotels, restaurants, massages, karaoke, marts, space rental and souvenir shops. “It is a very good strategy to collect more tax revenue as even though they would not be fined or penalised, they would pay taxes for their previous these non-gambling transactions and after they start doing so, they would continue and so the government would collect more revenue in the future,” he said.

Mey Vann, secretary of state of MEF, told Khmer Times recently that MEF has started implementing the revenue-based taxation rules and procedures on commercial gambling businesses on the self-declaration regime since December 30, 2022, after the lump sum-based taxation method had been practised for several decades.

Vann also said the new rules and procedures of taxation would enable the government to improve transparency and accountability in tax collection from the commercial gambling industry in Cambodia. They would also help the government in the implementation of anti-money laundering and anti-corruption measures.

“This means that there would no longer be cases of hiding cash to be paid to the authority even by the casino owners and tax officials as the rules and procedures determine check-and-balance practices for the balanced power among operators, regulators, inspectors and other relevant stakeholders involved in the implementation of the new proclamation,” said Vann.

“Check-and-balance practices mean all relevant parties are required to check or examine one another. None of them can exploit anything in the gambling business operations, while the casino party would not be able to cheat the gamblers and the gamblers would not be able to cheat the casino. Gamblers at casinos can file complaints if they have sufficient evidence,” he said.