Cambodia’s Prime Minister Hun Sen on Tuesday vowed to shut down English-language newspaper the Cambodia Daily if it does not pay millions of U.S. dollars in alleged back taxes, prompting the paper’s owner to call for an investigation into the charges.
On Aug. 5, government-aligned Fresh News published a leaked letter sent by the Ministry of Economy and Finance to the Daily, claiming it owed the government U.S. $6.3 million in back taxes and interest, dating back 10 years. Kong Vibol, director of the ministry’s General Department of Taxation, noted over the weekend that the paper was fast approaching a Sept. 4 deadline to pay the debt or face foreclosure.
The targeting of the Daily appears to be part of a larger crackdown prompted by Hun Sen’s recommendation at an Aug. 5 cabinet meeting that government agencies investigate alleged back taxes owed by media outlets and civil society organizations.
Speaking at an environmental forum in the capital Phnom Penh on Tuesday, Hun Sen called the Daily’s leadership “thieves” who had stolen from the country by refusing to pay their debts.
“Now they are trying to make the issue sound like it is politically motivated,” he said.
“They are thieves, yet they are teaching us how to respect the laws. If they want to continue to exist, they shall pay the tax. If they fail to do so, they shall have to pack and leave”.
In an emailed response to Hun Sen’s comments, Cambodia Daily owner Deborah Krisher-Steele said her company was “following the tax law impeccably” and demanded an explanation of why the General Tax Department believes it is in arrears.
“Normally when a company or individual disagrees, the process of an audit begins where a review and re-examination of the financials are conducted,” she said, adding that “this is [the] legal right of every taxpayer in Cambodia.”
“However we have been denied that right of process and the tax department and Hun Sen have demanded we pay the arbitrary amount of U.S. $6.1 million within 30 days (so far without providing any proof or documentation) and have threatened that if we don't pay it, they will seize our bank accounts.”
The Cambodia Daily has made charitable contributions of U.S. $39 million in helping to build schools and hospitals around the country, she said, adding that the donations should be deductible, according to Cambodia’s tax law.
Krisher-Steele also suggested that Kong Vibol had violated Article 94 of the Law on Taxation by leaking information about her company’s taxes to the public and questioned whether Hun Sen would enforce the law, under which those found in breach can be jailed and fined.
“This is a chance for Hun Sen to show his leadership and prove that he is capable of running his agencies competently and that there is no political motive behind the move to shut down The Cambodia Daily,” she said.
“If he wishes the people in Cambodia to have confidence in its tax system, he needs to show that his officials at the tax department follow their own laws and act fairly,” she added.
“Hun Sen can stop the shutdown of the Cambodia Daily and allow us a fair legal process. If at the end of the process, it is determined that we owe taxes, then we will pay [them]. However, he must first allow us the right to that process.”
The Cambodia Daily was founded in 1993 by U.S. reporter Bernard Krisher to assist in the development of journalism in Cambodia as the country embraced democracy. In April, he sold the paper to Bernard Krisher Jimusho Co. Ltd., a company owned by Krisher-Steele, his daughter.
RFA and Voice of America were also recently mentioned in a Ministry of Economy letter questioning whether they had paid back taxes or were licensed by the Ministry of Information.
Also on Tuesday, Hun Sen slammed election-monitoring group the Situation Room for receiving foreign funding and vowed to prevent the already disbanded grouping of Cambodian NGOs from ever operating again in Cambodia.
Speaking at the forum, Hun Sen accused the Situation Room—which questioned the fairness of commune polls held on June 4—of planning to topple the government and chastised EU Ambassador George Edgar for representing foreign governments that fund the group.
“What are foreigners here for? I shall never allow the Situation Room to exist again,” Hun Sen said.
“Your Excellency Edgar, you and your people are the ones who fund the Situation Room. The Situation Room is no different from a military control center. Why was it established in Cambodia in the first place? My Minister of Interior shall never allow it to exist anymore.”
The prime minister warned that the source of funding for the Committee for Free and Fair Elections in Cambodia (COMFREL)—one of the organizations that made up the Situation Room—will also soon come under scrutiny by the government.
Kan Savang, COMFREL’s coordinator of election observers, said the government may have misunderstood the purpose of his organization’s activities, noting that COMFREL had “no ill intentions” in creating the Situation Room.
He called for dialogue between Cambodia’s civil society organizations and the government.
Following Cambodia’s June commune polls, the Situation Room applauded improved election management, but noted significant restrictions on political freedom and limits to fairness.
It assessed that the conduct of the election campaign and electoral dispute resolution “need to be improved” and noted that “significant irregularities or issues occurred prior to the election which established a context that negatively impacted the fairness of the vote.”
Hun Sen, who has ruled Cambodia for more than 30 years, suggested at the time that the Situation Room and other detractors “would only call [an election] free if they could have free access to the Prime Minister’s house to kill him right on the spot.”
The prime minister’s ruling Cambodian People’s Party (CPP) won June’s commune elections, but the opposition Cambodia National Rescue Party (CNRP) received nearly 44 percent of all votes to the CPP’s 51 percent, in an outcome that many see as a bellwether for next year’s ballot.
Reported by Chandara Yang for RFA’s Khmer Service. Translated by Nareth Muong. Written in English by Joshua Lipes.