Govt establishes new special tax audit department
Govt establishes new special tax audit department
The Royal Government of Cambodia (RGC) Tuesday formed a new ‘Special Tax Audit Unit’ (STAU) under the management of the General Department of Taxation (GDT) of the Ministry of Economy and Finance (MEF). This is in addition to the eleven departments that already exist in GDP.
The initiative to create a new auditing team stands on par with other departments that operate under the GDT which is a mechanism to promote and expedite the resolution of taxpayer issues related to the tax audit aimed at improving business, trade and investment environments.
The sub-decree of four chapters and nine articles was signed by Prime Minister Hun Manet and Aun Pornmoniroth, Deputy Prime Minister and Minister of MEF on July 16.
Based on the RGC press release, some major tasks assigned to STAU are managing and conducting tax audit framework in line with laws and regulations to enforce the manual on tax audit procedures for officers and taxpayers.
The special team must review documents and risk analysis at the STUA department for a one-time audition without the need to check the documents of the enterprises.
The team is also expected to prepare an annual plan based on the manual on risk identification while being allowed to audit at the request of the companies and enterprises under its jurisdiction.
Chapter three of the sub-decree stated that enterprises to be transferred under the jurisdiction of the STAU department may be among the businesses that have received the gold tax compliance certificate and others through a committee established by GDT.
Speaking to Khmer Times, Dr Chey Tech, a socio-economic researcher said that the potential impact will improve the efficiency and transparency of the tax administration system and significantly contribute to Cambodia’s economic development and governance by improving the comprehensive audits and addressing taxpayer concerns promptly could encourage better tax compliance among businesses.
“More efficient audits and reduced tax evasion can lead to higher tax revenue for RGC which can be used for public services and infrastructure development and a more transparent and efficient tax system can create a better favourable business environment, attracting investments and stimulating economic growth while the increase of transparency and accountability can contribute to overall good governance in the country.”
Tech emphasised that several reasons led the government to create the STAU such as first, to address tax evasion and leakage as this special unit can focus resources on identifying and preventing tax avoidance.
Second, having a fair and efficient tax system is crucial for attracting foreign investment as the audit unit can help improve the country’s image as a business-friendly destination.
Third, to increase tax revenue which can be used to fund essential public services such as education, healthcare, infrastructure and other social protection programs to support the poor and vulnerable groups.
Fourth, the team can be seen as a step towards modernising the tax system and aligning it with international best practices.
It may be informed that GDT consists of 11 departments [exclude STAU] including, the Department of Administration and General Affairs, the Department of Personnel and Finance, the Department of Law, Tax Policy and International Tax Cooperation, the Department of Tax on Moveable and Immoveable Properties, the Department of Information Communication Technology, Department of Tax Crime Investigation, Department of Large Taxpayer, the Department of Small and Medium Taxpayers, the Department of Enterprise Audit, the National Tax School and the Phnom Penh Municipality Tax Division.
