Vehicles travel along Preah Monivong Boulevard in Phnom Penh. Hong Menea
Prime Minister Hun Sen has instructed officials to beef up collection of vehicular tax and to avoid unnecessary spending as the government seeks to shore up the coffers for its ongoing battle against Covid-19.
He warned that vehicle owners who evade tax may have their automobiles “burned” if they continued to do so.
The premier made the warning while presiding over the closing ceremony of the Ministry of Interior’s annual meeting on February 23.
“If tax evasions continue and we cannot recoup the money, it will be a disaster for our country,” he said.
He pointed to what he suggested was the efficacy of his previous warnings to tax cheats. “I said earlier that by July 2022, there will be no more tax-evading vehicles and right-wheel drive ones on the road. After that decision, we had collected incomes from 5,993 untaxed vehicles, netting $51.6 million [as of February 22],” he said.
The Ministry of Economy and Finance has estimated that there are over 10,000 untaxed vehicles in Cambodia. Should all of their owners pay the tax due, the amount collected would be in excess of $100 million.
“We have collected $51 million from tax thieves. This is just on vehicles, what about other things?
“The owners of about 5,000 vehicles who have not paid tax must come forward or I may issue an order to burn their cars one day. I may order [the burning], no matter how expensive it is,” Hun Sen said, adding that he believes the action would serve as a strong deterrent.
He called out members of the Royal Cambodian Armed Forces (RCAF), police and public officials, reminding them that they were not exempt from having to pay taxes on their cars.
Those who usually evade tax are the “rich and powerful” who hide behind police, RCAF, National Assembly, Senate, and government licence plates, he noted.
He then cautioned officials about their use of the public coffers. “Authorities at all levels have to be mindful about their expenses from now on. As we all already know, the world is going through difficulties due to [the Covid-19 crisis].”
He said the crisis meant that the government was unable to save any income, and was having to dig into its reserves. “Before the arrival of the virus, if we earned three, we spent two and saved one,” he said.
“But since it arrived, we have not earned enough [in state revenue] for our expenses. Even if we could earn more than $400 million per month, the money we had saved in the past is drying up.”
The premier instructed officials to delay public spending unless absolutely necessary. “My order is that even if you already had an expense plan, if possible, just delay it and wait until the Covid-19 situation eases. If we just spend without looking at the income sources, the expense is big,” he said.
He said the government intends to continue cash transfers for the needy, for which it is currently spending $40 million per month. The government will also continue to provide free treatment for Covid-19 patients at hospitals and treatment facilities.
In the same speech, Hun Sen reiterated that the government would “never” take land tax as the main national income, and claimed that the ruling Cambodian People’s Party (CPP) “will never tax” farms and rice fields.
He also took issue with Minister of Agriculture, Forestry and Fisheries Veng Sakhon for trying to limit the import of live pigs from abroad in an attempt to promote the sale of local pork products, saying that such a measure may be contradictory to international policy and could also increase the price of pork within the country.
