The General Department of Taxation (GDT) has issued a clarification to the public regarding the claims of a Phnom Penh private school that parents and guardians are required to pay a 20 per cent tax on tuition fees. The GDT also pointed out that state and private schools are exempted from paying income tax from 2024 to 2028.
The clarification came after Joy, a private Chinese-Khmer school, notified the parents and guardians of its students that it had been paying the tax instead of the parents for the past three years.
“As a result of the economic downturn fuelled by the pandemic, and owing to increased tuition fees, from this year on, the school will pay half of the 20 per cent tax, with parents and guardians covering the remainder,” it said in a notice.
The GDT issued a June 13 clarification, saying that the current tax laws, which were promulgated on May 16 by the King, do not stipulate a tax on tuition fees. It noted that any taxes owed by a school were the burden of the management and owners, rather than the parents and guardians of its students.
“The state does not require the parents of students to pay a 20 per cent tax on tuition fees, as claimed by Joy School,” it added.
The GDT announced that it will cooperate with the Ministry of Education, Youth and Sport to investigate any schools that attempt to implement such a policy. If any school is determined to be guilty of this form of misconduct, legal action will ensue.
“A February 27 letter from the Council of Ministers announced that state and private schools nationwide will be exempt from paying income tax, prepayment on income tax, value added tax and withholding tax on services, interest rates and dividends from 2024 to the end of 2028. Schools are still expected to pay salary taxes, as well as withholding tax on rented buildings, real estate and patent,” added the GDT.
Education ministry spokesman Ros Soveacha cited a letter from Joy School, noting that it had corrected the term “tuition fee tax payment” to “tuition fee increases”.
“The school would like to correct its June 9 notice which suggested that the government and education ministry require all students to pay a 20 per cent tax on tuition fees. The mistake was due to a technical error by the school’s administration. Therefore, we ask that the term tax payment be changed to tuition fee increase. The increase will allow the school to establish a laboratory, upgrade our sports pitch and support an annual study tour for our students,” said the letter.
Pech Polen, CEO of Westline Education Group, said the error may have resulted from the school’s management being unaware of the government’s support for the private educational sector.
He said the government regarded the education sector as a priority and has offered preferential tax incentives to schools.
“I suggest that the management and owners of private educational institutions closely monitor legal documents released by the government. Right from the start, the government has paid close attention to supporting the education sector. Private schools should look for an opportunity to join a formal training association, so they will receive up-to-date important information,” he said.