Top officials from the ministries of Telecommunications and Finance said Sunday that they have warned private phone operators here to pay millions of dollars owed to the state or face imposed interest and heavy fines.
Telecommunications Minister So Khun said the six companies, including mobile phone industry leaders MobiTel and Samart, are required to pay 2-percent interest on outstanding amounts owed the government starting this month.
Additionally, any company that continues to drag its feet on paying up will be slapped with a fine of 20 to 30 percent of the total amount of the debt, he said.
The directive is the latest attempt by the cash-strapped government to raise revenue. Leadership has been criticized for years by international donors for doing a poor job of generating funds by legitimate means to pay costs such as the salaries of civil servants and improve the education and health-care systems.
While several government sources said it will continue to be a challenge to extract money from the private companies, some of which are politically well-connected, So Khun insisted they would have to pay their debts to continue doing business in Cambodia. “The ministry has enough regulations to enforce them to pay the debts to the government,” he said.
The minister explained the government was ready to disconnect access to the phone gateways and terminate partnerships. But he said he hoped that wouldn’t be necessary. The use of the state’s international gateway and regular revenue-sharing agreements are two areas the companies have racked up debts in, officials have said.
However, phone company managers contacted Sunday denied their businesses owed irregular sums of money to the government.
Both the minister and Finance Undersecretary of State Ngy Tayi declined to say Sunday how much each of the six companies owe the government. But So Khun told a National Assembly committee meeting in late-January that nearly $17 million was owed to the government by the companies.
So Khun told the lawmakers that Samart (015 and 016 prefixes) had owed $3.3 million, Shinawatra (011 and fixed line) had owed $3.7 million, MobiTel (012) had owed $2.5 million, TriCelcam (out-of-business, 017) had owed $4 million, CamTel (018) had owed $2.2 million and CaminTel (provincial fixed lines) had owed $864,000. All the companies have prominent foreign partners.
Ngy Tayi said Sunday that most of the phone companies have ignored written requests from the ministry for payment. He explained an effective legal structure is not in place to help the government recoup money owed to it. “It is very difficult for [the two ministries] to force them to pay off the debts because of no laws,” Ngy Tayi said. “All we can do is to beg them and persuade them to pay.”
Several phone company operators on Sunday claimed there are discrepancies on cash-flow figures between the government and the private companies.
“We don’t have any overdue payment,” said MobiTel Manager Iain Williams.
Samart’s Somchai Lertwiset-Theerakul also denied the accusation. “Samart is the only company who has paid on time,” Lertwiset-Theerakul claimed. He maintained the Ministries of Finance and Telecommunications are mistakenly asking his company to pay $1.5 million.
He also accused some officials at the Telecommunications Ministry of stealing money his company had paid. “The ministry’s poor performance in financial management would damage the investment climate in Cambodia,” he said.
And CaminTel’s Country Director Steve Yanuar also said his company doesn’t owe any money to the government. But he said the new measures would adversely affect the industry.
According to Rasmei Kampuchea (Light of Cambodia) newspaper, the new measures are a Finance Ministry proposal recently endorsed by Prime Minister Hun Sen.
The government has made a series of public moves in an attempt to show donors—who hold their annual Consultative Group meeting in Paris in May—it is serious about reform and improving revenue. Recent moves include restrictions on logging activities and a crack down on marijuana growers.