Mobile Phone Sellers Call for Tax Verification on Second-hand Devices: A Historical Perspective

In recent developments, a significant crackdown on untaxed and undocumented mobile phones in Memot district, Tbong Khmum has led to substantial fines for several businesses. This enforcement action has prompted shop owners to urge authorities to implement tools to track tax payments on second-hand phones effectively.

On May 31, 2024, the General Department of Customs and Excise of Cambodia (GDCE) clarified that 356 new smartphones and 955 second-hand mobile phones were seized due to the lack of customs clearance and legal documentation. These confiscated devices are currently held at the office of the investigation and suppression of smuggling area six in Huoch village, Krek commune, Ponhea Krek district, awaiting legal proceedings.

The Legal Framework and Public Concerns

According to Article 8 of the Law on Customs Duties, mobile goods are classified as “special goods” and are subject to customs duty. The GDCE assured that second-hand mobile phones purchased domestically would be returned to their owners, alleviating some public concerns. However, the import duty on used “push-button Nokia” mobile phones remains a contentious issue. These phones are subject to a 15.5 percent import duty and a $5 declaration fee, totaling $0.775 per phone, contrary to allegations of a $93 tax.

Shop Owners’ Reactions and Calls for Digital Solutions

The crackdown has led to significant distress among shop owners. Piseth, a shop owner, shared a picture on Facebook of an empty display cabinet, lamenting that customs officials had seized his second-hand phones. Similarly, Ratha Memot, another shop owner, expressed his frustration but chose not to comment further as he addressed the situation.

Eng Soheng, a phone shop owner at Depo Market, highlighted the challenge of verifying tax payments on second-hand phones, as they often lack clear documentation. Soheng suggested that the GDCE implement a digital system to scan phone code numbers, which would help track the tax status of phones, even if they have changed hands multiple times.

Historical Context and Previous Efforts

The call for a digital tracking system is not new. In September 2021, Cambodia’s customs department launched a system to track mobile phone imports and SIM cards to improve tax collection. This system manages the international mobile equipment identity (IMEI) of mobile phones and other SIM card utilities, ensuring proper taxes are paid. This initiative came as Cambodia saw a surge in mobile phone and internet users.

Market Insights and Popular Mobile Brands in Cambodia

According to data from the telecommunications regulator for the Ministry of Posts and Telecommunications, the number of mobile phones purchased in Cambodia reached 20,708,146 in May 2021, with 17.26 million internet users, including mobile internet users. Most mobile phones imported to Cambodia come from Vietnam, China, Hong Kong, Korea, and the United States, with Vietnam accounting for 70 percent of the total imports. The most popular brands include Apple, Oppo, and Samsung.

The Path Forward

Despite the current challenges, shop owners like Tong Seanghor at Depo Market believe in a more informed approach by the GDCE. He suggests that customs officers should educate and inform sellers about customs law practices rather than abruptly seizing goods. Seanghor advocates for a comprehensive program to raise awareness about customs laws and help sellers comply with regulations.

At Toul Kok Market, shop owner Seang Hong shared his concerns about the future, particularly with second-hand mobile goods. He proposed the development of a user-friendly tool to verify if taxes have been paid on second-hand phones, ensuring fair tax collection practices.

Conclusion

The recent events have underscored the need for a robust system to verify tax payments on second-hand mobile phones in Cambodia. As shop owners navigate the complexities of customs regulations, the call for a digital tracking system becomes increasingly pertinent. This approach would not only streamline the process but also provide much-needed clarity and security for both sellers and buyers in the mobile phone market.

Popular Phone Brands in Cambodia:

• Apple
• Oppo
• Samsung
• Nokia
• Huawei
• Xiaomi
• Vivo
• Realme
• OnePlus