In an escalation of an ongoing tax dispute, the Finance Ministry’s general tax department on Tuesday accused The Cambodia Daily of committing tax evasion “for years” by pocketing money levied as value added tax, allegations the newspaper’s deputy publisher emphatically denied.
The department, in an “urgent clarification” posted to its website and on government-aligned Fresh News, repeated threats made by Kong Vibol, the department’s chief, that the Daily will face imminent closure if a disputed $6.3 million tax bill is not paid by September 4.
“The Cambodia Daily newspaper…has committed tax evasion for years by not paying even one riel in tax,” the document reads.
Moreover, the Daily “has been collecting VAT” that it should have paid to the state but instead, kept it “in its own pocket,” it continues.
The Daily’s deputy publisher, Deborah Krisher-Steele, disputed the accusations. “The Cambodia Daily never could or did collect VAT without having a tax number and every dollar of VAT collected or income tax withheld has been paid,” she wrote in an email.
Ms. Krisher-Steele said the Finance Ministry, which administers the tax department, could look for verification at the bills it paid for advertisements that have run in the Daily for decades.
“If they want proof of this, they can look at their own receipts,” she said. “The Ministry of Finance placed ads with us for decades so they knew and had to have approved.”
The Daily was hit with the tax bill on August 5 after Prime Minister Hun Sen ordered a ministry investigation into tax payments by NGOs and media outlets. Since then, a targeted and increasingly public investigation has ensnared two U.S.-funded radio broadcasters.
The tax department joined Mr. Hun Sen and other ministry officials in denying there was any political motive behind the investigation into the Daily’s tax affairs, despite what the Daily’s deputy publisher cited as a lack of due process. The department has been enforcing the law “on taxpayers of all circles” for the purpose of managing tax collection “with effectiveness, transparency, and equity,” reads the letter, which appeared on Fresh News under a “Breaking News” banner at about 5 p.m.
The government’s crackdown on media outlets has drawn condemnation from international observers, including the U.N., E.U., U.S. and numerous rights groups, with many suggesting the government is purging critical media. (Translation by Kim Chan)