Some Businesses Cheating on VAT, MPs Told

The government says it is investigating allegations that some companies are cheating the new value-added tax system.

The issue emerged Friday as National Assembly members made slow progress in debating amendments to the 1995 commercial regulation and registration law.

Lim Sokun, a Sam Rainsy Party parliamentarian, said it is commonly known that fake invoices are being used by companies to pay less than what is owed in VAT.

“It’s an issue of corruption. The fake invoices are resulting in the loss” of revenue, Lim Sokun said.

Sok Siphana, secretary of state of the Ministry of Commerce, told parliamentarians that the ministry is investigating the issue.

VAT is a 10-percent tax collected on a wide variety of goods and services, ranging from phone calls to gasoline.

The tax, which was implemented Jan 1, has been one of Cam­bodia’s major success stories this year, resulting in $64 million of revenue during the first nine months. Government officials told donors last week that tax revenue overall is up 58 percent in the first nine months, largely because of VAT.

Government officials couldn’t be reached Monday for further comment because of the holiday. But a manager of a cigarette company also complained Sunday that some companies are cheating to the disadvantage of the law-abiding companies.

“The fake [VAT] invoice system is a big problem for honest businessmen and investors,” said the manager, who requested that his name not be disclosed. “Both buyers and sellers take advantage of this fake invoice system.”

The debate on the amendments is scheduled to continue Wednesday.

Meanwhile, Funcinpec parliamentarian Dien Del cited at Friday’s Assembly session the recent release of convicted marijuana smugglers after a fine of only $2,500 each as an example of why commercial laws must be written without loopholes.



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