Vendors in Tbong Khmum province’s Memot district are waiting for the return of hundreds of new and used mobile phones which were seized by local customs officials last week. They also urged the wholesale suppliers they purchased their stock from to resolve the issue of untaxed goods.

The incident sparked widespread public debate, with some social media users suggesting that even a cheap Nokia 105 “dumb phone” which sells for $20, is liable to be taxed $93. Many of them also accused officials of confiscating both new and used phones, and even ones which had been brought to the phone shops for repair.

On June 3, the owner of one of the phone shops, identified only as Ratha, told The Post that the issue has yet to be resolved for either old or new phones, and hung up.

A day earlier, she told media outlet Fresh News that a total of 652 phones – 588 of them second-hand – were confiscated by customs officials.

Ratha explained that her shop often brought used phones from local members of the public. She was unsure as to whether import duties had been paid on her stack of new phones, but said that she trusted her suppliers.

She said her shop did not sell the Nokia model commonly known as the “flashlight”, which were the subject of rumours of $93 in duties.

In response to the issue, the General Department of Customs and Excise of Cambodia (GDCE) issued a statement explaining that their officials had collected 365 new and 955 used phones, all of which lacked customs seals or documents which demonstrated a legal source.

It said all untaxed new goods will be stored until a solution can be found, but clarified that the second-hand phones will be returned to the merchant.

While requesting the prompt return of locally bought second-hand phones, several shop owners whose goods were confiscated questioned what procedure they should follow when buying a used phone from a member of the public.

“I would like to clarify how to find out whether a used phone has been taxed or not. I have been selling phones for more than 10 years, but I was unaware of this issue. We can check for tax stamps on the packaging of new phones, but it is impossible to know which second-hand ones have had duties paid on them and which ones have not,” said Ratha.

The GDCE issued a brief explanation of import tax obligations, noting that all imported goods are subject to the taxes and duties that match the appropriate tariff line, and that records must be kept for ten years.

Vendors may only sell items which have the correct tax documents and stamps on the packaging, while consumers should only purchase legally imported goods with a clear customs seal.

The GDCE also stated that before goods may be legally transported or distributed, they must have the required customs documents attached.

“It must be understood that the possession, sale, purchase, transfer or receipt of illegally imported goods without the permission of the customs administration shall be considered as an offense which is punishable by law,” explained the GDCE.

Meas Sok Sensan, spokesperson for the Ministry of Economy and Finance, which oversees the GDCE, said he had no further comment on the issue because the GDCE has already offered a clear explanation.

He noted that the actions of the Tbong Khmum GDCE officials were permitted by law.

Hong Vanak, an economic researcher at the Royal Academy of Cambodia, believed that the authorities should return the used phones to the phone shop owners as soon as possible, because the tax or sales documents for those items have likely been lost.

“When it comes to the second-hand phones that were sold to the shops by members of the public, a solution should be found as soon as possible. They should not be frozen while awaiting long-lost documentation. Storing them with the customs officials is not a good solution, and only punishes the owners of small phone shops. This affects their livelihoods,” he said.

He suggested that the Tbong Khmum example could be used as a case study which should educate both the buyers and sellers of used phones of the importance of keeping receipts and other paperwork. This could also reduce the possible trade in stolen goods.

When it come to new goods, including phones, Vanak reminded all consumers, traders and importers to abide by the law. He reiterated that vendors should check for tax documentation when they buy goods for resale, while buyers must check to see whether taxes like value added tax (VAT) have been on goods before purchasing them.

“The most important question is how did these goods evade taxation when they were imported into Cambodia? We have land, sea and air border entries, but they must all be strictly controlled, especially by authorities like customs officers. They need to clarify how these goods came to be in the Kingdom,” he said.

Vanak believed that solving this problem would require all consumers, retailers, importers and the authorities to share a collective responsibility for respecting the law and paying tax.

“If the government manages the issue well, and if the customs officers and other authorities at border entry points control them well, then these products won’t be found in the markets anymore,” he said.

“If traders refuse to buy untaxed goods, then there will be no market for fraudulent importers or any officials who may turn a blind eye to their activities,” he added.

Sin Chanthy, managing director of logistics company Linehaul Express Cambodia, and president of the Cambodia Logistics Association (CLA), told The Post that goods are usually taxed upon arrival in the Kingdom, apart from those which are exempt, such as raw materials which will be re-exported as finished goods.

“For example, if goods are imported through a port, we have to pay taxes at the port. If the goods enter through a land border crossing, taxes must be paid there. If they come in via an airport, tariffs and duties must be paid at the airport,” he explained.

The GDCE had not responded to requests for comment as of June 3.