Marcus Holmes / Phnom Penh Post CEO says $3.9m tax bill is “not political”

By: Janelle Retka - Posted on: March 20, 2018 | Cambodia

Newspaper’s CEO and an independent economist suggest that the Cambodian tax department is following normal procedure 

A selection of Cambodian newspapers prior to last year’s closure of the Cambodia Daily Photo: Jeremy Meek

A large tax bill handed down to the Phnom Penh Post, Cambodia’s last remaining independent English-language newspaper, is part of an ongoing, “perfectly routine” audit negotiation process rather than an attack on free press, according to the paper’s CEO, Marcus Holmes. He added that such audits were hitting businesses across the country in a government effort to strictly enforce the years-old tax law.

The Phnom Penh Post’s $3.9 million bill comes months after the September shutdown of its rival newspaper, the Cambodia Daily, over a disputed $6.3 million tax bill that the paper’s owners claimed was created in an effort to silence independent media.

But amid rumours that the Post’s tax bill is yet another example of an attack on free press in the country, Holmes said that the ongoing talks with Cambodia’s General Department of Taxation (GDT) were nothing out of the ordinary.

“This is a perfectly routine tax audit. This is not us being shut down,” Holmes told Southeast Asia Globe. “We’re not in the same situation the Cambodia Daily was. This is a number that is halfway through an ongoing negotiation with the tax office about a tax audit that happened at the end of last year.”

The company’s internal audit led the Post to “different numbers based on the same thing”, after which it offered to pay the GDT $50,000, according to Holmes.

“The GDT have been on a revenue-raising spree, and so they’ve been doing these really nasty audits for everybody… This is not a demand from the tax office for $3.9 million,” he added. “It’s not political; it’s got nothing to do with us being the last independent newspaper in Cambodia. This is just a tax audit.”

Tax department director Kong Vibol declined to comment.

According to Cambodian economist and director of the Centre for Policy Studies, Chan Sophal, the Post’s case does indeed appear to be a routine result of the country’s “tough law” on taxation.

“The tax auditors can perform auditing at any company and they can apply the tax law retroactively ten years back – and it’s normal,” he said. “They have been doing that a lot to businesses and some have to be fined heavily. I’ve heard of businesses that are penalised and they have to pay millions of dollars.”

The back and forth between the Post and the GDT was normal, he said, adding that the competency of the GDT and enforcement of the tax law had improved greatly in recent years.

“The question is whether it’s done evenly with every firm or not. That’s what I don’t know,” Sophal said. “It’s unfortunate that it’s happened to the Phnom Penh Post.”

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