The 82-member Cambodian Microfinance Association (CMA) recently announced that its affiliated microfinance institutions (MFIs) are declining to enforce the 10-percent value-added tax (VAT) that the country’s Ministry of Economy and Finance (MEF) has levied on financial services. CMA Chairman Hout Ieng Tong reportedly criticized the lack of lead time given to adjust to the change, adding that, “We are worried that clients will be annoyed when they use our financial services because in the past they have never been informed that they are obligated to pay VAT.” Officials from the General Department of Taxation have agreed to meet with representatives of CMA to discuss their grievances and possible resolutions.
CMA is a nonprofit that was established in 2004 and seeks to increase communication among MFIs and relevant stakeholders such as government authorities, donors, creditors and investors.
By Jacob O’Driscoll, Research Associate
Sources and Additional Information
The Phnom Penh Post: Microlenders Refuse to Apply Prescribed VAT
Cambodian Microfinance Association
Ministry of Economy and Finance
Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at https://www.microcapital.org/products-page/.
- MICROCAPITAL BRIEF: Symbiotics Raises $18.5m for Georgia’s TBC Bank via MSME Bond Platform
- MICROCAPITAL BRIEF: ZAMFI Blames Zimbabwe’s Liquidity Challenges for Microfinance Portfolio-at-risk (PAR) Ratio Surpassing 12%
- MICROCAPITAL BRIEF: IFAD, Cambodian Government, Private Sector Investing $60m in Microfinance, Infrastructure Program to Help 15k Farming Families Expand Operations
- MICROCAPITAL BRIEF: Indonesian Online Lender UangTeman Raises $12m in Equity Funding for Consumer Loans, Research and Development
- MICROCAPITAL BRIEF: Benin’s Government Hikes Microcredit Program Budget to $5m