Draft Bill May Curtail NGO Tax Exemption

The Council of Ministers last week raised the touchy issue of re­moving the tax-exempt status of NGOs, sparking immediate concern in some corners.

Finance Ministry Secretary of State Kong Vibol said Thursday that there have only been “discussions” so far about examining NGOs’ tax status on a “case-by-case” basis.

The latest debate on the issue came during last Friday’s Council of Ministers discussion on a draft law on NGOs.

“The Council of Ministers de­bated a great deal about equal taxation, people making contributions to the country,” government spokesperson Sieng Lapresse said at a Friday briefing.

He quoted Prime Minister Hun Sen as saying that everyone, big or small, had an equal responsibility to pay taxes.

Since early last year, the F­i­nance Ministry has floated the idea of taxing the salaries of both foreign and Cambodian NGO employees. So far, however, the gov­ernment has not attempted to make the proposals law.

Directors of several major NGOs expressed caution about commenting on the issue.

However, for others, even the idea of the government taxing NGOs has provoked disbelief .

Maurits van Pelt, chief of the Medecins Sans Frontiers mission in Cambodia, doubted his organization ultimately will be taxed, saying donors would cut funding if their money was to go to pay taxes and not MSF programs.

“I’ll be surprised if we were taxed,” he said. “We’d take that as a signal to leave the country.”

He quoted Prime Minister Hun Sen as saying that everyone, big or small, had an equal responsibility to pay taxes.

Still, Sieng Lapresse said in the same briefing that any individual NGO proposal for tax exemption that was “reasonable” would be ap­proved.

 

The ministry has also proposed stripping NGOs of their tax-exempt status as a way of generating more income and cracking down on businesses claiming to be NGOs that import goods duty-free.

 

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