"Phnom Penh: Government officials and parliamentarians from the Cambodian People's Party explained in detail the regulations for setting of taxes on land and houses, and the increase of road taxes in 2010. This decision is part of the decisions for the national budget for 2010 which the National Assembly discussed and approved on Monday 30 November 2009.
"Defending the national budget draft for 2010, officially known as a financial management law for 2010, during the parliament session on Monday morning, the Minister of Economy and Finance, Deputy Prime Minister Keat Chhon, said that the increase of road taxes and the collection of taxes for real estate including land, houses, buildings, and constructions are a measure to seek additional income while Cambodia is encountering an economic and financial crisis.
"Deputy Prime Minister Keat Chhon added that measures of the government to create taxes on land and houses is not expected to bring in much here in Phnom Penh, because there are 180,000 houses from which only US$3 million to US$9 million can be made. This tax collection will surely be made from high ranking officials and rich people, but it does not have an impact like the tax rates of land and houses in foreign countries, where up to 1% of the total value is charged. In our country, it is only 0.1%. The government will use it to reduce the state support of resources to under national levels and to expand taxation culture which is a movement for direct tax income in the future.
"Deputy Prime Minister Keat Chhon stressed that this new tax was created after proper studies, by an assessment committee, but it is not to frighten the people.
"This statement of the Minister of Economy and Finance is a defense and a response to the criticism of Sam Rainsy Party parliamentarians when the parliament begun discussing to approve a draft of the national budget for 2010.
"The total national budget for 2010, about US$2 billion, was criticized by the Sam Rainsy Party because of the increased expense allocated for national defense and security, which amounts to about US$274 million, while expenses allocated for agriculture and contributing to the development of the national economy were increased by only 5%.
"Sam Rainsy Party parliamentarians also opposed the policy to collect land and house taxes, and to augment road taxes from automobiles, which is proposed as a measure to increase income for state expense in 2010.
"Parliamentarian and spokesperson of the Sam Rainsy Party, Mr. Yim Sovann, said during the parliament session that to augment road taxes and the collection of land and house taxes are strange moves and cannot be supported. Both the rich and the poor cannot cry during the economic crisis at present, because their houses and their land cannot be sold, and some even are indebted to banks.
"The parliamentarian Yim Sovann suggested that the government should try to be brave to collect other taxes, like from visits to the Angkor Wat Temples [contracted to a private company], from forest exploitation, from land contracted out as economic concession land, and to monitor the selling of state property, so that it becomes transparent. Doing so, the state will have increased income and does not need to collect taxes from houses and to increase the road tax.
"The National budget law for 2010 says that taxes will be collected from real estate such as land, houses, buildings, constructions, and others, with a value over Riel 100,000,000 [approx. US$25,000]. The tax will be collected annually at a rate of 0.1% of the total value of the real estate. But the tax excludes agricultural land, and land and buildings of the government, of communities, or individuals who serve religious or humanitarian activities. But houses for normal citizens must pay taxes.
"The budget law for 2010 foresees also an increase of taxes on means transportation including automobiles (road taxes):
"However, 106 parliamentarians among 109, who were present during the session on Monday morning, raised their hand in favor of the overall content to accept the draft of the national budget for 2010 to be discussed and approved. The Parliament session continued until Monday afternoon, and the parliament plans to continue to discuss the national budget law, which consists of 6 chapters and 20 articles, on Tuesday morning." Rasmei Kampuchea, Vol.17, #5061, 1.12.2009
This article was first published by The Mirror, Vol. 13, No. 641 - Tuesday, 1.12.2009
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