Cambodia Daily given till Sept 4 to pay taxes

Tax Department head Kong Vibol speaks at a meeting last year in Phnom Penh. Heng Chivoan

Cambodia Daily given till Sept 4 to pay taxes

Phnom Penh Post | 21 August 2017

The Tax Department’s Kong Vibol on Saturday said English-language newspaper the Cambodia Daily faced shuttering and the seizure of its assets if it failed to pay back taxes it allegedly owes by September 4 – a seeming escalation in the government’s recent targeting of NGOs and independent media outlets for tax-related scrutiny.

Vibol’s statement came after his department on August 4 sent the Daily a bill – which was soon leaked – for $6.3 million in back taxes, penalties and interest, and gave them one month to pay up. The letter followed a directive from Prime Minister Hun Sen for authorities to take a closer look at tax compliance by NGOs and media organisations. 

Speaking to government-aligned Fresh News, Vibol said the Daily’s owner, Deborah Krisher-Steele, daughter of founder Bernard Krisher, had said she was unaware of the “debt” when she took over the publication from her father. The Daily has said that prior to the takeover, the publication was run as a non-profit, and noted that Krisher’s charitable contributions – reportedly totalling in the tens of millions – should be taken into account when calculating its tax burden, but Vibol said both challenges to the bill had been rejected by his department. 

“The Cambodia Daily faces a complete shutdown and its assets will be confiscated if it fails to pay the tax by the 4th September deadline,” the Tax Department director told Fresh News. He clarified this would involve the seizure and freezing of physical assets and the suspension of the newspaper’s operations.

The August 4 document – addressed to Bernard Krisher Jimusho Co Ltd, the company established by Krisher-Steele when she took over the paper – cites a purported “audit” of the paper’s finances from 2007 to 2016, and says the company must pay about $2.39 million in taxes, $957,784 in “additional” taxes and $2.95 million in interest. It gave the paper 30 days to respond.

Vibol and his deputy, Vann Puthipoll, could not be reached yesterday. 

Traffic passes in front of the General Department of Taxation office last week in Phnom Penh. Hong Menea

 

Krisher-Steele yesterday said in an email that the “astronomical amount” of back taxes was an arbitrary figure, and was not based on a true audit or due process from authorities. 

Additionally, she said the leaking of confidential documents to the media also breached privacy laws, calling the targeting of the Daily a “sad day for press freedom” that betrayed a strategy of “execution first, trial after”.

“There is no doubt that there is a political will behind these actions. This is clearly a tax bill that is not meant to be paid but whose purpose is to close down the Cambodia Daily,” she said.

She added that the newspaper was open to an audit and would have fully cooperated if asked for one. She reiterated that the Daily had been founded by Bernard Krisher as a nonprofit project in 1993 to train Cambodian journalists, adding that its assets and trademark transferred to the new company in April. 

“If Bernard is meant to pay taxes for the Cambodia Daily, the [General Department of Taxation] need to perform a real audit,” she said, adding that no real assessment had been made of the Daily’s expenses, revenues and donations. 

Ouk Kimseng, spokesman for Ministry of Information, yesterday washed his hands of the matter, saying the ministry – which is responsible for regulating news outlets – could not help a firm that did not respect the law. “I have no rights to say what the [other] ministry will do because this is the authority of ministry relevant to tax. So, don’t ask whether the Ministry [of Information] will intervene,” he said. 

The Daily was not the only news organisation to be sent a tax notice. Khmer-language news outlets Radio Free Asia and Voice of America were also pulled up by a Ministry of Economy letter questioning whether they had paid back taxes or were licensed by the Ministry of Information. 

All three outlets have a history of often critical coverage in a media landscape dominated by outlets that skew pro-government.

RFA spokesman Rohit Mahajan said last week that the radio outlet had been approached by the government on the taxation issue last October, and that they were complying with any requests by the authorities. 

“The sudden unilateral action taken by the Department of Taxation this week does not reflect our cooperation with the process provided to us, and is more in line with the increasing and worrisome pattern of intimidation of RFA and other international broadcasters,” he said via email. 

Similarly, George Mackenzie, from VOA’s public relations department, said his outlet had also engaged the government and was awaiting clarification on the request, given the conflicting information from various government agencies.