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To understand more about why you are so important to our member-supported initiative, we encourage you to read the following from our managing editor ~ Read more

The Globe as you know it is changing.

Since 2007, Southeast Asia Globe has been a space for some of the region’s best writers and photographers to take our readers behind the headlines into the stories that shape people’s lives. Every month, you could expect to pick up our latest print edition and find high-quality journalism, analysis and artwork waiting on every page. And since 2007, we’ve fought to uphold our promise of quality and independence to you, our readers.

But, like we said, the world is changing. Print publications just aren’t reaching the audiences they need to fulfil their promise of informing, educating and entertaining the public. Advertisers continue to invest in digital platforms while printing costs creep ever higher. Print may not be dead, but it’s fighting for its life. And we’re tired of waiting by a sickbed for its condition to improve. We want to be present at the birth of something new.

That’s why Southeast Asia Globe is relaunching as a member-driven platform featuring daily long-form features combining world-class journalism with enthralling art design and data-centered tech. Through our core pillars – Power, Money, Life and Earth – we are focusing in on the central issues that our readers have always engaged with most, with the same in-depth coverage of politics, business, social affairs and the environment that you’ve come to expect since 2007.

But leaving print behind us doesn’t just save our backs from lugging stacks of magazines across Southeast Asia. It opens up a global readership who don’t just want to read the news, but have a say in the stories that we tell and the way that we tell them. We’re not asking you to take out another magazine subscription – our stories are open to all. What we’re offering our members is a space where they can pitch and vote on the stories that they think deserve to be told. We want to inspire an engaged and active community of members who vote for, comment on and contribute to the stories that matter most to them. We want to work with our members to curate the way they engage with the news – not just as readers, but as an active extension of our editorial team.

That’s how we’re changing to bring you great stories. Here’s how we’re not.

We’re independent. Always have been, always will be. We’re not owned by any corporation or aligned with any state. We choose the stories that we tell, and the way that we tell them.

We’re creative. We’re not interested in churning out breaking news stories on the hour, every hour. We believe that the best stories are the ones that come alive on the page, digging deeper into the issues that shape Southeast Asia – and bringing you along for the ride. From our dedicated designers to our new software development team, our commitment is to constantly challenge ourselves to find new ways of reaching out to our readers.

We’re open. Challenging governments, NGOs and businesses to be transparent with the public means nothing if we keep our own readers in the dark. That’s why we will be completely open about why we tell the stories that we tell – and how we pay for them. Work with us to build something that endures where many media fail, and decide with us exactly where that money is going.

Above all, we’re optimistic. And yeah, we know what you’re thinking. Faced with impending climate collapse, the rise of right-wing authoritarian governments across the world, widening wealth and income inequality and deepening divisions rooted in race or gender or creed, it’s hard not to open the papers and feel the weight of the world pressing down. But we wouldn’t be doing this if we didn’t believe that when people work together, they can make their little corner of the world a more just, open and equal place.

And that’s why we can’t do this without you. We believe that across the globe is a community of people who care deeply about social justice, environmental action and press freedom – and who will join in to help make those ideals a reality. We’re not just holding our hand out – we need your voice to play a vital role in building Southeast Asia Globe into a leading space for progressive causes in the region. Tell us what stories the mainstream media is missing. Share with us the causes that matter most to you, and how we can champion those causes not just across Southeast Asia, but the world.

Our vision is clear. By 2025, we want to be recognised for building a great space for outstanding journalists from across the region to explore new ways of telling Southeast Asia’s most vital stories. Let’s bring together a community of engaged and loyal members who want to help reshape the media rather than just read it. And we want to reach a point where our readers, not advertisers, are the ones working to support our shared vision of an inclusive media.

We can’t do this without you. Let’s get together and build something that we all believe in.

If you’re interested in joining us, sign up to our newsletter, like us on Facebook, follow us on Twitter. And watch this space.

Could improved tax collection strengthen democracy in Cambodia?

By: David Hutt - Posted on: February 9, 2016 | Cambodia

With Cambodia starting to collect more tax, some argue it could increase political accountability in the Kingdom

Cambodia has long been lambasted for not doing enough to collect taxes. In 2006, for example, it collected a little over $600m. In recent years, attempts to levy taxes on ordinary people have been met with protest but the overall amount of tax collected has been rising. The Department of Taxation recently announced that it collected $1.3 billion in 2015, up 21.6% from the previous year. The Department of Customs and Excise – which collects taxes on imports and exports – has yet to release its figures for last year. In 2014, it collected $1.34 billion.

tax, garment factories, cambiodia
Cambodian workers in a garment factory in Phnom Penh. The Cambodian garment industry is the largest income earner of the national economy and employs about 500,000 mostly female workers. EPA/Mak Remissa

The Cambodian government’s recent enthusiasm for taxation is no mere avocation. It is a reaction to an increasing demand for more funds. In December, it announced that the national budget for 2016 would be $4.3 billion, up 12% from last year.

However, even with the rise, the current level of public spending is low, said Napoleon Navarro, head of policy at the United Nations Development Programme (UNDP) in Cambodia. The budgets of upper-middle income countries in Southeast Asia, such as Thailand and Malaysia, are between 15 to 17% of GDP, whereas Cambodia’s is only 6%, Navarro said. If Cambodia hopes to become an upper-middle income country and achieve its Sustainable Development Goals’ by 2030, he added, it would need to dramatically increase public spending in the future. And this will need to be funded by taxation.

Traditionally, foreign aid and favourable loans have aggrandised Cambodia’s national budgets, while international assistance in areas such as health care, education and poverty relief has diminished the amount the government needs to spend on its citizens’ welfare.

Yet, Cambodia is expected to transition from being a least-developed country to a lower-middle income country within the next 12 months, which will mean that foreign aid and preferable loans may be scaled back.

“Cambodia must be prepared for this as donors would reduce developmental aid and grants, including concessional or soft loans, and give it less-favourable trade deals, et cetera,” Srey Chanthy, an independent economist, told the Phnom Penh Post.

Both of these factors – which will demand more money for the national purse at the same time as Cambodia’s once-abundant sources of cash are drying up – mean that tax reform is an imperative for the government.

Although some progress has been made, this will not be easy. According to Navarro, one of the main problems is that Cambodia’s workforce has been – and remains – largely composed of people in “a dominant informal sector, vulnerable employment, and subsistence agriculture”. Typically, professions that prove difficult to tax.

And then there is Cambodia’s quotidian corruption. To give the most stark example: In December, a report by Washington-based Global Financial Integrity found that between 2004 and 2013 almost $15 billion left Cambodia illegally, mostly through ‘trade misinvoicing’. This is where companies misstate volumes of imports or exports on shipping invoices, and covertly move money into another country. Almost $4 billion exited Cambodia this way in 2013, all of which was untaxed, and which was worth four times as much as that year’s national budget.

Nevertheless, the government does appear to be making some improvements. The taxation department announced that there was a 27% rise in corporate profits tax and 18.6% in income tax collected last year. And the government is revamping the way it taxes smaller companies.

Cambodia traditionally operated a two-tier tax structure, explains Anthony Galliano, CEO of Cambodian Investment Management. On the one hand, there were the ‘real regime’ taxpayers: registered companies, state-owned companies and other businesses with some system of formal accounting. On the other hand, there were the ‘estimated regime’ taxpayers: companies or small ventures with no formal accounting – essentially without a paper-trail of profits – and taxable amounts for these were estimated based on discussions between taxpayers and tax officials.

The Phnom Penh Post reported that in November the government set about scrapping the ‘estimated regime’ to bring all enterprises under the ‘real’ tax regime. The publication also reported that 60% of the country’s state tax collectors worked with ‘estimated regime’ payers, which brought in less than 1% of the total tax revenue. In December, the government issued a prakas – an official edict – to end the ‘estimated regime’, creating a stricter system for small and medium enterprises.

However, it is likely that in the foreseeable future Cambodia’s taxation system will rely heavily on indirect taxes, as opposed to direct taxes such as income tax and import tax. Galliano said that VAT – an indirect tax – “contributes significantly” to the overall tax pool and is “probably the largest tax levied” by the government.

“Over the medium term, chances are Cambodia might have to rely on more regressive indirect taxes to fund its development aspirations, before putting in place a more progressive income tax system,” Navarro said.

If taxation does increase in Cambodia, it could lead to violent scenes like those seen last May, when protests erupted in the Cambodian town of Poipet, on the border with Thailand, following complaints by cross-border porters that customs-taxes were costing them most of their daily wages. “We can barely get enough food, so we set up the strike seeking to reduce the cost of tax,” one protestor told the Phnom Penh Post.

Or, more positively, the laws of unintentional consequences could mean that higher taxation revenues could lead to improvements in democracy.

In the 1980s, a number of Western academics and political economists proposed a theory often called the ‘taxation-produces-representation hypothesis’. A government that relies on taxation to fund its public spending, the hypothesis says, is under greater pressure to be accountable to its taxpayers, is more motivated to promote the prosperity of taxpayers and, as citizens observe how their hard-earned money is being spent by the government, they are more likely to speak up and protest if they think it is being depleted improperly.

Sophal Ear, an associate professor of diplomacy and world affairs at Occidental College, California, and author of Aid Dependence in Cambodia: How Foreign Assistance Undermines Democracy, has been arguing in favour of the ‘taxation-produces-representation hypothesis’ for many years, with a focus on Cambodia’s foreign aid ‘dependency’.

“Large amounts of foreign aid – relative to a country’s GDP, tax revenues and government spending, over long durations – can hurt a country’s development and governance,” Ear said. “In Cambodia’s case, [foreign aid] has hurt democracy because the more the authorities rely on outside resources, the less they are incentivised to collect taxes, which are needed for holding the authorities accountable.”

And, according to Navarro, Cambodia’s increased reliance in taxation “could potentially improve the bargaining position of ordinary citizens and social movements, and strengthen the liberal democracy that Cambodia is”.