Go after lenders who don’t comply with taxes, GDT asks NBC
The General Department of Taxes (GDT) has asked the central bank to take action against two lenders who were seen promoting their services on social media despite breaching tax rules.
The request concerns Happy Loan Cambodia Co Ltd and Tiger Loan, and comes a few days after the National Bank of Cambodia (NBC) issued a public warning on August 25 about advertisements and other types of promotion of the practices and businesses of Illegal and deceptive loans.
GDT’s notice, signed by its CEO Kong Vibol and dated August 31, revealed that Happy Loan Cambodia “has registered for tax purposes, but company details are not up to date, nor have they declared their taxes,” while that Tiger Loan “has failed to meet its tax registration requirements.”
The NBC action “would strengthen compliance with the Tax Law and the Banking and Financial Institutions Law [LBFI]improve the business climate and ensure fair competition, and especially promote the effective and efficient implementation of the law”, said the department under the Ministry of Economy and Finance.
The Post was unable to reach either lender for comment at the time of publication.
Notably, however, Tiger Loan says on its Facebook page that it offers “fast and easy” unsecured loans nationwide starting at $50, with “simple paperwork” and “100 percent client confidentiality guaranteed.”
Speaking to The Post on September 5, Cambodia Microfinance Association (CMA) spokesperson Kaing Tongngy stressed that legitimate online lenders operating in the Kingdom are those licensed by NBC or the Financial Services Authority. Non-Banking (NBFSA) of the Ministry of Finance.
These lenders are regularly monitored by authorities and have clearly defined addresses, business activities and customer protection principles, he said.
“What we have seen on social networks are mostly illegal operations carried out by different groups. We have witnessed a significant increase in these illegal online lending schemes since the start of Covid-19, when many people were short of cash.
“Unfortunately, we have also seen many fall victim to online lending. These illegal operators charge ridiculously high interest rates, rip off their customers, fail to follow customer protection principles, use intimidation and violence, and often lead to over-indebtedness,” he added.
In its Aug. 25 precautionary press release titled “Illegal Advertising and Lending,” NBC said that the banking and financial institutions it licenses to conduct business include: commercial and specialty banks, microfinance institutions regardless of recruitment status of deposits, financial leasing companies and rural credit institutions.
These institutions provide credit and other relevant services to businesses, companies and individuals. They are under the control of NBC and their customers are protected by law.
However, NBC warned that it has observed some nefarious actors openly advertising loans through various means, including online ads, on social media, or through brochures and flyers in public places. Lending by these unlicensed companies or individuals is illegal, in particular the LBFI.
“To avoid being scammed or any other consequence of obtaining informal credit and to maintain stability and public confidence in the banking system, we call on the public to exercise greater caution and encourage them to use the services of formal institutions.
“We condemn all forms of informal dissemination of information and loans. In the meantime, we are cooperating with authorities to take legal action against any company or individual who is involved in illegal activities,” the letter added.