Some Tour Agencies Skate Tax to Undercut Competition

Both Cambodian and foreign travel agencies have complained to the Ministry of Tourism about an increase in unlicensed travel agencies that can afford to offer lower prices be­cause they don’t pay licensing fees.

Chin Pim, manager of the Ang­kor Travel Agen­cy, estimates there are be­tween 30 and 50 companies operating with no licenses or even office ad­dresses, often just a computer in one room. He also be­lieves as many as 50 percent of the “leg­al” travel agencies have let their licenses ex­pire.

As of June, there were 183 travel agencies registered with the Ministry of Tourism.

A licensed travel agent is re­quired to leave $5,000 on deposit at the National Bank. A license to operate costs $400 the first year and $150 per year after that. Tourism companies are also required to pay a 10 percent value added tax on all sales.

The general manager of a Korean agency who last week filed a complaint with the Tour­ism Ministry but wish­ed not to be named said he was afraid his company would close if the illegal agencies continue to operate.

“My company is a legal one,” he said. “I spend $6,000 on licenses, taxes, phone, water and electricity, and off­ice rental.

“If the government doesn’t crack down on illegal companies, I don’t think we’ll have enough money to pay our tax.”

Another man who identified himself only as Mr Lee runs the Open Travel Agency, which he says brings only Korean tourists to Cambodia—up to 100 in a good month or as few as 10 in a bad month.

Located in one room in a house, with no sign along the street, Open Travel Agency claims to be insured and promotes “low price of service.”

Lee said Open Travel Agency has a main office in Korea and has been operating in Cambodia for five years.

The company has a branch office in Siem Reap province, he said, but he couldn’t remember the address.

He said the company was registered with the Ministry of Commerce and that it had a license from the Ministry of Tourism, but he couldn’t remember how much a license cost. He said Open Travel Agency “pays money to the government some of the time.”

But In Sary, head of the travel department at the Ministry of Tourism, said the ministry has no record of Open Travel Agency applying for a license.

In Sary estimates 10 percent of travel agencies are operating illegally.

Minister of Tourism Veng Sereyvuth also acknowledged illegal agencies are a problem. “Let me check on these irregularities,” he said. “I will ask my staff to investigate. And I will order my people to take action.”

 

 

 

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