A joint working group from the General Department of Taxation (GDT) and the General Department of Customs and Excise (GDCE) have warned that they will take strict action in accordance with the laws and regulations in force by confiscating cigarettes that circulate in the market without a new type of tax stamp.
The warning came at a seminar on the implementation of the new tax stamp for cigarettes, held on March 13 and presided over by GDT deputy director-general Ming Ban Kosal, who co-chairs the joint working group. Also in attendance were representatives of tobacco industry.
Phe Somony, director of the GDCE Phnom Penh branch who serves as deputy chair of the working group, said the event aimed to disseminate information to the industry on the obligation to use the new tax stamps for cigarettes as well as the obligation to include health warnings on tobacco products.
“As a follow-up measure, the team will confiscate cigarettes circulating in the market without the new or old tax stamps, or any that use counterfeit stamps, and those involved must be held accountable before the law,” he said.
In this regard, Kosal said that in the past, the Ministry of Economy and Finance issued a number of prakas and regulations related to the implementation of the tax stamps for cigarettes, which the ministry has also continuously updated in line with the state of business and the development of the national economy.
He recalled that on December 19, 2016, the ministry issued prakas No 1480 on the use of tax stamps for paying special taxes on cigarettes, identifying and launching a new type of high security tax stamp made of high-quality paper with a QR Code that also has security features embedded into it that prevent people from forging them.
He added that according to circular No 015 from the finance ministry, from August 2017 onwards, all cigarettes without the new type of tax stamp are not allowed on the market. But he said the GDT and GDCE observed that there are still cigarettes without the new type of tax stamps on sale.
“The finance ministry has repeatedly educated markets, supermarkets, cigarette distributors, wholesalers and retailers by distributing leaflets and notification letter No 001 and Letter No 014 and also invited traders to attend the workshop directly,” he said.
Kosal urged all enterprises engaged in the tobacco products business to participate in declaring income taxes properly and in a timely manner to avoid tax reassessment via auditing or the investigation of tax offences, which may be subject to fines or other penalties. He warned that they could even be charged with money laundering offences, for which criminal penalties are imposed.
Ky Sereyvath, an economics researcher at the Royal Academy of Cambodia, said it is important for the authorities to take action on the collection of taxes on cigarettes as well as alcohol. He said people who smoke cigarettes endanger their health, while the disposal of cigarette butts is bad for the environment.
“Government measures should tighten taxes on alcohol, beer and cigarettes and not allow them to be used in public places. Cigarettes have been targeted in the past, but beer has not yet been dealt with,” he said.
Sereyvath said he supports thorough measures to collect taxes related to cigarettes in order to boost national budget revenues, saying it is especially important that any corrupt tax officials who collude with enterprises or businesses be prosecuted in accordance with the laws.