Phnom Penh property tax expected to improve city

[PROPERTY REPORT]

The Municipality of Phnom Penh anticipates increased revenue of US$12 million from the newly implemented property tax, with the funds to go towards city improvements the Phnom Post reported.

“Our city is more developed, but it is not enough.  We need a larger budget to develop a lot of projects in the city, to compete with other cities in Asia,” said Governor Kep Chuktema.

“If we do not try to collect more profit, we will face a large problem,” he added.

The programme was announced in 2009 and, with a few exemptions, applies a 0.1 per cent tax on real estate valued at more than 100 million riel (US$24,540).  Properties are expected to be registered by September, with the first funds being collected one year later, in September 2012.

Developers said they supported collecting property taxes, but called for transparency on how the funds were collected and spent.

Khneg Ser, assistant to the management team of the proposed US$2 billion Camko City satellite project, said it was in line with practices in most countries.

“I think we should implement this tax, as [the funds will] contribute to increased economic growth in Cambodia,” he said. “We support it, and will follow as the government requires.”

He added the government should ensure that all eligible property owners and housing developers pay the applicable taxes.

However, some voiced opposition to the state-ordered property taxes, saying it would hit a property sector still in recovery.

Dangkor district land owner Cheap Sareth said he felt it was too early for the government to begin collecting property taxes.

“The government is moving too early to collect tax on property while the country is still recovering from the global economic crisis,” he said.