Customs Tax No Longer A Cash Affair

In an effort to curb corruption and improve transparency by reducing cash transactions, the customs and excise department announced Thursday that tax payments on goods moving across Cambodia’s borders will soon have to be made by check.

The new policy, under which all payments will be made out to an account at the National Bank of Cambodia, will go into effect on Feb 1, according to a statement from the customs and excise de­part­ment at the Ministry of Fi­nance.

Custom officers have been ac­cused of turning a blind eye to undervalued merchandise, foregoing mandatory cargo checks and collecting less tax than is due in exchange for unofficial “fees.”

In an attempt to boost the country’s paltry tax revenues, Prime Minister Hun Sen last month pub­licly condemned these in­stances of petty corruption and urged officials to collect taxes on the full value of imported goods.

Kun Nhem, deputy director of the custom and excise department, said that requiring tax-payers to write checks was common practice for developing countries and would help more revenue find its way to government coffers.

Trusting people with bags of cash is never a good idea, he said, “I think the new system will be more transparent and secure.”

Kok An, chairman of Anco Brother, a large import-export company, said Thursday that the policy was a good one, but added that small-scale businesses, which comprise the bulk of im­porters, may face difficulties dealing with the bank.

Ros Sarin, an accountant at the Takeo province customs office agreed: “It is not easy for the bank to transfer small amounts of money paid by small-scale vendors.”

Meanwhile, Hun Sen’s public reproach of corruption in the customs department, in tandem with a new toll on National Route 4, has led to a glut of incoming car­go containers at Sihanoukville port as importers grow exasperated with rising costs, officials said Wednesday.

“Before, importers could compromise with customs” to pay less tax, said Hout Sakor, a customs official at the port. “But now they cannot…. No one dares to break the order of the prime minister.”

Customs officers have long been said to accept bribes in exchange for underestimating the value of arriving goods, and import-export companies benefited from the system by paying less tax than required by law.

Hout Sakor said that customs in Sihanoukville have become stricter in the past month and have also begun to perform double-checks in addition to the preliminary X-ray scan of containers.

“You know that scans do not tell us everything, scans just tell us the type of goods, but not the amounts inside the containers,” he said. “So we have to inspect one more time.”

Officials discovered that the value of some containers’ contents was significantly higher than that declared by the im­porter, but when customs de­manded the difference in import tax, the containers were merely left at the port, he said.

“If you are a businessman, you need a profit,” he said. “If customs wants you to pay 100 percent tax, you must be a bit sad.”

While the storage lot at Siha­noukville port is normally home to about 300 cargo containers at any given time, that number has roughly doubled since the prime minister’s speech, Hout Sakor said.

Several shipping companies confirmed Wednesday that more containers than usual were stalled in Sihanoukville. Repre­sentatives said they were unable to explain the delay because shipping lines are not generally in­volved in import fees.

Lou Kim Chhun, the port’s director general, said that he was involved in collecting the import tax, but that he believed the new tolls on National Route 4 were partly responsible for the slow-down.

Although container trucks have had to pay tolls on the road in the past, the fees were extended to smaller vehicles last week, inciting protests among taxi drivers, who briefly blocked the road before they were scattered by police.

Hout Sakor agreed that the new tolls were contributing to the back-log and added that it was also partly due to the time of year, with import-export companies trying to close their annual accounts before transporting more goods to Phnom Penh.

Vong Tha, manager of Tec Srun Import-Export Company, which has containers stored at the port, confirmed that cargo was piling up at the port despite costly parking fees. But he could not identify a specific problem.

He said that his own company seemed to be following everyone else’s lead.

“We are waiting to see what the others do,” he said.

(Additional reporting by Christo­pher St John)



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