Hun Sen Announces Broad Cuts of Petty Taxes

The country’s lower class will receive a series of tax breaks starting in 2016, Prime Minister Hun Sen announced Thursday, with tariffs on motorbikes, tuk-tuks and farm machinery to be waived, along with fees at stalls in state-owned markets.

Striking a populist tone during the inauguration of the Beijing-funded $27.5 million Cambodia-China Friend­ship Bridge in Phnom Penh, the prime minister said that people would no longer need to run away from tax collectors.

Prime Minister Hun Sen speaks with Chinese Ambassador Bu Jianguo during the official opening of the Cambodia-China Friendship Bridge in Phnom Penh Thursday (Siv Channa)
Prime Minister Hun Sen speaks with Chinese Ambassador Bu Jianguo during the official opening of the Cambodia-China Friendship Bridge in Phnom Penh Thursday (Siv Channa)

“From next year onward, the road tax for motorbikes, tuk-tuks and agricultural machinery such as tractors, tillers and boats will no longer be charged,” he said. “It will be cut off.”

The current road tax varies based on vehicle type, but the tax for driving a motorbike generally runs between $1 and $2 per year.

Standing on a stage on the eastern end of the new bridge, Mr. Hun Sen told about 1,000 people in attendance that the tax breaks would be of great benefit to the more than 1 million people who ride motorbikes in Phnom Penh.

“This is a benefit for the people because, before this, they had to use their money to pay tax but now they will not. Before this, those who did not pay the tax had to drive to escape the police, but from next year onward, they will no longer have to drive to escape the police,” he said.

“Besides this, for vendors, lump-sum tax will be cut off and the price of patents will be reduced according to the size of commercial companies,” he said. Currently, vendors at state-owned markets must pay a monthly fee of between $5 and $7.50.

The prime minister pointed out that the cuts would result in revenue losses for the government, and urged citizens to pay taxes for the last time by the end of the year.

“There are three months more. I appeal to those who have not yet paid the tax: Please go to pay the tax because I have no right to cancel the law,” he said. “Just consider it as the last tax payment to contribute to repairing roads.”

On the sidelines of the inauguration, Vongsey Vissoth, a secretary of state at the Finance Ministry, said that the new measures would ease the burden on his overworked officials, who he said spend more than 60 percent of their time collecting petty tariffs.

“Economically, it is not efficient. And, socially, making demands of the small people provides no result,” he said.

“Therefore, it is a waste of time and annoying for the people,” he said. “For example, every month, the officials go to demand the taxes and have to reason with them again and again. So, just cut them off.”

sothear@cambodiadaily.com

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