2010 Real Estate Taxes On the Way, Gov’t Says

With 2010 spending legislation approved by King Norodom Sihamoni on Dec 16, the government is now forming a body to assess the value of real property and collect taxes on it, according to the Finance Ministry.

“It is now coming into effect,” said Sok Saravuth, director of the ministry’s budget department. “We are preparing the committee to assess real estate values.”

Real estate taxes will be 0.1 percent of the value of properties assessed at over $25,000, according to the budget law. Finance Minister Keat Chhon told the National Assembly in December that the taxes could generate up to $9 million annually for use at the local level.

Mr Saravuth said he did not yet know how many people comprise the committee or from which institutions they will be drawn.

Approving a spending increase of 11 percent over 2009 appropriations, the National Assembly adopted a 2010 budget of $2 billion, allotting $277 million to the Interior and Defense ministries and $440 million to the social sector ministries such as Health, Education, Fine Arts, the Environment, Women’s Affairs and Labor.

The Agriculture Ministry will receive $20 million, with an additional $19 million reserved for financing in the agricultural sector.

According to Mr Saravuth, the government will also increase taxes on motor vehicles, with amounts levied to vary between $119 and $476 annually depending on the size and age of engines.

“Taxing cars is not as difficult as taxing real estate because we are used to taxing cars and we are just increasing the taxes,” said Mr Saravuth.

Chhith Sam Ath, executive director of the NGO Forum on Cambodia, said yesterday that collecting taxes directly from the public will increase their sense of civic duty and interest in government.

“When citizens pay direct taxes, they will observe their tax expenditure in order to make this more transparent and accountable,” he said. “It does not affect the poor but the rich.”

He called on the government to ensure the independence of the real estate assessor committee and to reduce indirect taxes on goods and services, which are also paid by the poor, as direct taxes are raised.

Mr Saravuth said the committee’s real estate assessments will be published, thereby preventing the government from overcharging property owners.

“If the price is published, no one can charge more than that price,” he said.

 

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