Cambodia’s new national property tax would be implemented from January next year, boosting the federal coffers up to an estimated US$4 million, officials said on Sunday.
The real estate division at the Ministry of Economy and Finance was granted approval on Friday to establish a committee for property evaluation, Norng Piseth, the Real Estate Division chief, told The Post.
“We have prepared the prakas to establish a committee for property evaluation and we will start implementing tax collection on property from early 2011 next year, as the National Assembly requires,” he said.
The National Assembly passed the law for a tax on all real estate, including land, houses, apartments and other infrastructure constructed on that land, in November 2009.
According to the Prakas – or edict Number 493 – the property tax will be an annual payment calculated as 0.1 percent of the value of the property as estimated by the evaluation committee, based on market prices. Only those properties worth 100 million riel (US$25, 000) or more will be taxed.
Norng Piseth said the tax would bring more income for the government to further development.
“This tax is very important in order to increase the national income to develop the country,” he said.
The new levy is expected to raise between $3 million to $4 million in additional revenue, according to the Ministry of Economy and Finance estimates.
Touch Samnang, project manager and architecture of the Diamond Island development project behind developer Overseas Cambodia Investment Corp, said Sunday that he supported the tax on property, but also called for fairness.
“I think that we should have this tax in order to increase the economic growth in Cambodia. So, it is not a problem for us. We’re really [in] support [of] and follow what the government requires,” he said, adding that the government should ensure transparency, including that all eligible property owners and housing developers did pay up.
Cheap Sareth, a land owner in Dangkor district, Phnom Penh, said Sunday he felt that it was too early for the government to begin collect property taxes.
“In my point of view, I think the government is moving too early to collect tax on property while the country is still recovering from the global economic crisis,” he said.
The International Monetary Fund said in its yearly assessment on Cambodia for 2010 that long-term fiscal stability for the Kingdom required further improving revenue administration.
“Gains in tax collection offer the best hope for Cambodia to meet the dual objective of securing fiscal sustainability and mobilising resources for its development needs,” the fund said in a release on its findings.
Keat Chhon, MEF deputy prime minister said during National Assembly discussions on the property tax last year that the new tax was not only contributing to the national budget, but was helping establish a “tax culture”.
“We do not expect much income from this new law, but we are making this law as we also want to establish a tax culture which will facilitate us to collect tax directly in the future,” he said.
At the time, he said about 180,000 households would fall under the requirements to pay the new tax.
MEF deputy prime minister could not be contacted for comment on Sunday.