Draft taxation law sails through Nat’l Assembly
THE government has high expectations that a newly passed draft taxation law will play an important role in the government’s “sharp and deep” reforms to mobilise revenue in an effective, transparent and accountable way.
The draft Law on Taxation was unanimously passed by the National Assembly (NA) on April 19, with all 95 votes of the lawmakers present during its plenary session, said an NA statement.
Minister of Economy and Finance Aun Pornmoniroth was on hand to defend the draft law, saying it offers comprehensive legal provisions aimed at contributing to the government’s reforms.
“On top of that, the law will ensure the sustainability of economic growth, state revenue, equal and just competition and social protection, while increasing the development of industry and the Small and Medium Enterprise [SME] sector and attracting investment, in order to enable Cambodia to achieve upper-middle income status by 2030 and join the high income group by 2050,” he said.
He added that the draft law, with 20 chapters and 255 articles, had been comprehensively discussed based on inputs provided by specialists of different levels at several state institutions, and was approved by the Cabinet on March 31.
The Post has yet to obtain a copy of the law. But after it was enacted by the NA, senior lawmaker Suos Yara shared several important elements of the draft on social media.
He said that based on Article 82 of the new law, the transfer of a business from one individual to another will not result in additional taxes.
He added that several area of service provision will be tax-exempt.
They include education, insurance, transportation, healthcare, public post services, water and electricity suppliers, unprocessed agriculture producers, rubbish collection and non-profit activities.
Cambodia Chamber of Commerce (CCC) vice-president Lim Heng applauded the approval of the draft law. He said the private sector would welcome it as they support a system of taxation which is transparent, accountable and effective.
“In the past, the CCC had discussed tax collection with the General Department of Taxation [GDT]. We are confident that the law will strengthen tax collection and render the process more transparent. All business should pay equal tax, no matter whether they are large or small,” he said.
The government explained recently that the law is not completely new legislation, but rather an update that eliminates several loopholes and ensures consistency with several other laws.
“It compiles several articles from different relevant legal provisions, which makes them easy to find, understand and enforce. It also closes several loopholes by adding provisions that were determined by experience. This includes agreements to avoid overlapping taxation, and other international best practices,” it said.
It added that the government had included “gentle principles” which would serve as incentives for businesses during times of economic or financial crisis, or other emergencies, in order to maintain stable livelihoods and healthcare for the public.