Sue non-tax-compliant lenders, GDT asks NBC

The General Department of Taxation (GDT) has asked the central bank to take action against two lenders who were seen promoting their services on social media despite failing to comply 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 regarding advertisements and other types of promotion for companies and practices of Illegal and deceptive loans.

GDT’s notice, signed by its managing director Kong Vibol and dated August 31, revealed that Happy Loan Cambodia “has registered for tax, but the company details are not up to date, and they have not filed their taxes either”, while Tiger Loan “has failed to meet its tax registration requirements”.

The action of the BNC “would strengthen compliance with the law on taxation and the law on banking and financial institutions [LBFI]improve the business environment and ensure fair competition, and above all promote effective and efficient law enforcement,” said the department, which is under the Ministry of Economy and Finance.

The Post could not reach either lender for comment at press time.

However, it should be noted that Tiger Loan states on its Facebook page that it offers “quick and easy” unsecured loans nationwide starting at $50, with “simple paperwork” and “guaranteed privacy at 100% for customers”.

Speaking to The Post on September 5, Cambodian Microfinance Association (CMA) spokesperson Kaing Tongngy pointed out that legitimate online lenders operating in the Kingdom are those licensed by the NBC or the Non-Banking Financial Services Authority (NBFSA) of the Department of Finance.

These lenders are regularly vetted by authorities and have clearly defined addresses, business activities and customer protection principles, he said.

“What we have seen on social media are mostly illegal operations by different groups. We have seen a significant increase in these illegal online loan schemes since the onset of Covid-19 when many people ran out of money.

“Unfortunately, we have also seen many victims of online lending. These illegal operators charge ridiculously high interest rates, defraud their customers, disregard customer protection principles, use intimidation and violence and conduct often to over-indebtedness,” he added.

In its August 25 precautionary press release entitled “Advertising and Illegal Lending”, the BNC stated that the banking and financial institutions it authorizes to operate include: commercial and specialized banks, microfinance institutions regardless of or their status as a depository institution, leasing companies and rural credit institutions.

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

However, NBC warned that it had observed some nefarious actors openly advertising loans through a variety of mediums, including online ads, on social media, or through flyers and flyers in public places. Lending by these unlicensed companies or individuals is against the law, in particular the LBFI.

“In order to avoid falling victim to fraud 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 due diligence. caution and encourage him 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 the authorities to prosecute any company or individual who engages in illegal activities,” the letter adds.

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