Cambodia's Customs Department announced on May 27 that it would stop processing paperwork for import and export companies, and halt cross-border activity if they fail to meet today’s deadline for online tax registration.

For companies that had yet to receive an official value-added tax (VAT) licence by registering their information with the General Department of Taxation’s (GDT) online service, or a tax patent paper, the Customs Department said it would halt operations.

Bou Bunnara, chief of the public relations unit at the General Department of Customs and Excise, said the announcement was a joint commitment by the two departments to put pressure on companies that had yet to comply.

He added that the move would strengthen transparency and increase the collection of government revenue.

“Any company that has not updated their documents with the GDT, [we] will not process any paperwork and they cannot export and import anymore,” he said, adding that customs officers need to be presented with documents to prove that they have registered with the online system.

The GDT's online registration system, aimed at centralising company data, was officially launched last October. While the system was heralded as a way to stop tax avoidance, according to the customs department, numerous companies had ignored the deadline.

Despite numerous calls, the GDT declined to provide the total number of companies that had registered online. However, when the system was first launched, Kong Vibol, director-general at the tax department, said 5,000 companies had already registered.

A tax officer at the GDT, who is not authorised to speak to the media, said the majority of companies in the tax office’s database, had yet to register online.

Hy Ramy, managing director of HRM (Cambodia) Group, a local import and export company that has registered his company online, said the registration process is not complicated.

“We should follow the regulations to ensure transparency in collecting tax revenue, and to make sure that all the tax paid actually makes it to the government,” he said.

For the first four months of this year, the tax department had collected $638 million, a 21 per cent increase compared to the same time last year.