The General Department of Taxation (GDT) has issued a third reminder for taxpayers to declare outstanding property and unused land taxes by September 30.

“GDT has noticed that some real estate owners have not fulfilled their obligation to pay taxes on unused land this year,” said the statement dated September 19.

The GDT added that this is done to “ensure the efficiency of tax collection” and to prevent too many people paying taxes close to the deadline on September 30.

What is taxable unused land?

According to the Ministry of Economy and Finance (MEF), taxable unused land refers to land that does not have any of the following five characteristics:

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First, land with a house where the owner lives for more than half the year, or 183 days, from the start of the tax year. The house has to be the owner's principal place of residence.

If the owner lives in the house for 183 days or more in a tax year, they can apply for a refund. But, if they own multiple houses, they will need to choose which one to claim as their primary residence.

Second, rental land that generates a monthly income of more than 80 percent of a twelfth of the land value in a tax collection year multiplied by a coefficient determined by MEF.

Third, if land is used to conduct legitimate economic activities that generate more than 80 percent of a twelfth of the land value multiplied by coefficient, it is considered a taxable unused land.

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Fourth, state-owned land that is leased to a legal entity or person, having any of the three characteristics stated, is also considered to be a taxable unused land.

Last, when contracted land fails to state its performance due to a force majeure, it is considered taxable unused land. Force majeure are events that are beyond the control of contract parties, such as natural disasters and wars.

Hong Vanak, an economic researcher at the Royal Academy of Cambodia, believes that the government will help taxpayers who are unable to pay taxes due to economic difficulties.

However, he thinks that the government should be careful not to create a disincentive for people to pay taxes. “I think people who own a lot of land and property, most of them are able to pay taxes,” he said.

For taxpayers who are unable to pay tax, there should be transparency, he remarked. Adding that it is important to maintain a balance between helping those who need it and ensuring that everyone pays their fair share.

Vanak said that it is the obligation of taxpayers to inform the GDT if they are not able to pay taxes. “Taxpayers should not try to avoid paying taxes because it is important for the government to have revenue to fund essential services and programs,” he noted.