The General Department of Taxation (GDT) maintained its commitment to begin the collection of capital gains tax with effect from January 1, next year. Hong Menea
The General Department of Taxation (GDT) maintained its commitment to begin the collection of capital gains tax with effect from January 1, 2021.
Director-general Kong Vibol made the remark on Thursday during an event that was streamed online via the department’s Facebook page.
Responding to public concern about the looming tax, he said it was not meant to “oppress the people”, but was aimed at pushing for tax fairness and encouraging real estate companies to register with the GDT.
“We will only tax those who sell at a profit. Those who sell at a loss will not have to pay this tax . . . The tax is for the benefit of the people. [Revenue collected] is taken first and foremost to develop infrastructure.
“The capital gains tax paid will be lower than sellers’ commissions to real estate agents. As far as I know, commission is typically around three per cent, which means that the complaints raised [citing the contrary] don’t reflect the reality,” Vibol said.
Unless there is a change, he said the GDT will start tax collection on capital gains made from the sale of assets and capital investment from January 1, as set by its parent ministry, the Ministry of Economy and Finance.
“I am a law enforcer, so the law requires me to enforce the imposition of capital gains tax from January 1, 2021.
“I have to comply, but . . . if the government orders to delay implementation of the tax, we will immediately act accordingly,” Vibol said.
Speaking at the event, ministry undersecretary of state Van Puthipol said the tax applies to all taxpayers who make capital gains, but noted that of those most liable, 90 per cent are exclusively real estate traders.
“In order to participate in creating tax fairness, if you sell at a profit, you have to pay this tax. And if you sell at a loss, you do not have to pay the tax,” he said.
The ministry has said the tax will be levied on taxpayers’ gains from the sale, transfer or establishment of property rights, or the registration of ownership or possession rights.
It said its Prakas No 346 is set to be enforced from January 1, next year by the GDT and will require individuals to pay a 20 per cent capital gains tax rate on calculated profits from the sale of certain assets including land, buildings, stocks, bonds, licences, patents and currencies.
Last week, the Housing Development Association of Cambodia submitted a letter to the ministry requesting the government to postpone the implementation of capital gains tax.
The investment advisory firm said in the letter that the Kingdom’s real estate sector continues to struggle under the weight of the pandemic.
Its secretary-general Huy Vanna told The Post on Sunday that the tax will only add to the burden on the real estate industry.
“We have requested the Ministry of Economy [and Finance] to postpone the collection of capital gains tax payments until a more suitable time or when the Covid-19 and economic situations improve. Today’s real estate market is in the doldrums,” he said.
