Follow up on non-tax-compliant lenders, GDT asks NBC

The General Department of Taxation (GDT) asked the central bank to take action against two lenders who promoted their services on social media despite not complying with tax regulations.

The request concerns Happy Loan Cambodia Co Ltd and Tiger Loan, and comes days after the National Bank of Cambodia (NBC) issued a public warning on August 25 about advertising and other types of promotion of illegal and deceptive loan companies and practices.

The GDT notice, signed by CEO Kong Vibol and dated August 31, revealed that Happy Loan Cambodia “has registered for tax purposes but the company details are not up-to-date or have not declared their taxes”, while Tiger Loan “registered did not meet the tax requirements. tax registration “.

NBC’s activities “would strengthen compliance with the Tax Act and the Banking and Financial Institutions Act [LBFI]improve the business environment and ensure fair competition, and in particular promote effective and efficient implementation of the law, ”said the department under the Ministry of Economy and Finance.

The Post has not been able to contact any of the lenders for comment since the press.

Note, however, that Tiger Loan reports on its Facebook page that it offers “quick and easy” unsecured loans nationwide from $ 50, with “simple paperwork” and “100% customer confidentiality guaranteed”.

In an interview with The Post on September 5, Cambodia Microfinance Association (CMA) spokesman Kaing Tongngy emphasized that legitimate online lenders operating in the Kingdom are those licensed by NBC or the Non-Bank Financial Services Authority (NBFSA) of the ministry of finance.

These lenders are regularly monitored by the authorities and have clearly defined addresses, business activities and customer protection policies, he said.

“What we saw on social media was mostly illegal operations by various groups. We have witnessed a significant increase in the number of illegal online loan programs since the beginning of Covid-19, when many people were tied to cash.

“Unfortunately, we’ve also seen many people fall victim to online loans. These illegal operators charge absurdly high interest rates, defraud their customers, fail to respect customer protection rules, use intimidation and violence, and often lead to over-indebtedness, ”he added.

In a preventive press release from August 25, entitled “Advertising and illegal borrowing”, the National Broadcasting Council informed that the banking and financial institutions it licenses to operate include: commercial and specialized banks, microfinance institutions regardless of the depository status, leasing companies financial institutions and rural credit institutions.

These institutions provide credit and other relevant services to companies, enterprises and individuals. They are under the control of NBC and their customers are protected by law.

However, NBC has warned that it has observed some villainous actors openly advertising loans through a variety of media, including online advertising, social media, or through leaflets and flyers in public places. It is illegal to grant loans by these unlicensed companies or individuals, especially LBFI.

“In order to avoid embezzlement or other consequences of obtaining informal credit, and to maintain stability and public confidence in the banking system, we urge the public to be more cautious and encourage them to use the services of formal institutions.

“We condemn all forms of informal information dissemination and lending. Meanwhile, we are working with the authorities to take legal action against companies or individuals who engage in illegal activities, ”the letter added.

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