Cambodia: SMEs-directed standardised tax procedures underway

Wednesday 31 December 2014 08:48 CET | News

The Cambodian Ministry of Economy and Finance is drafting standardised accounting procedures for SMEs, reports.

The main goal of the draft is to create an official taxation ledger, improve tax collection efforts for the government and facilitate loan evaluation for lending institutions. There were 500,000 SMEs which accounted for 1.67 million jobs and 99% of the country’s business, according to the 2011 Cambodian Economic Census.

Ngy Tayi, head of Cambodia’s National Accounting Council, has said that few Cambodian SMEs fill out current forms according to accounting standards adopted around 2004. Many Cambodian businesses still record their income and expenses in handwritten notebooks.

The basic requirements for accounting, financial reporting and auditing in Cambodia are set out in the Law on Commercial Enterprises and the Law on Corporate Accounts, their Audit and the Accounting Profession. The Accounting Law mandates the use of an accounting system based on standards promulgated by the International Accounting Standards Board.

There are currently two accounting frameworks used in Cambodia. The first is the International Financial Reporting Standards (IFRS) and the International Financial Reporting Standards for SMEs (IFRS for SMEs). Domestic and foreign companies, whose securities trade in a public market, are either required or permitted to use IFRS in their consolidated financial statements (CIFRS). Non-publicly accountable domestic companies have a choice between IFRS and IFRS for SMEs. However, the recent standardised tax procedures have no clear release date, though it is expected in 2015, and are not mandatory.

Recently, lawmaker Son Chhay has called for an investigation into the accounting procedures in the Angkor Wat temple complex, which allegedly deprived the Cambodian state of USD millions.

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Keywords: Cambodia, SME, tax system, standardisation, ledger, procedures.economy, finance, merchants, business, public record, loan
Categories: Payments & Commerce
Countries: World
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