* Independent paper faced $6.3 million tax demand
* Government crackdown escalated with arrest of opposition leader
* The Cambodia Daily was founded by an American (Updates with ban on manager leaving country)
By Matthew Tostevin and Prak Chan Thul
PHNOM PENH, Sept 4 (Reuters) - One of Cambodia’s most stridently independent newspapers, the Cambodia Daily, published its last edition on Monday with the headline “Descent Into Outright Dictatorship” as it closed amid a crackdown on critics of Prime Minister Hun Sen.
The English-language paper had been given a deadline of one month to pay $6.3 million for years of back taxes, which the publication disputed and described as “astronomical”.
Its final front page led with the arrest on Sunday of Cambodia’s main opposition leader, Kem Sokha, who was accused of treason in a significant escalation of the campaign against Hun Sen’s opponents. The paper also reported on its own closure.
“We have been a burr in Hun Sen’s side for the entire time that we have been operating,” said the Cambodia Daily’s American editor-in-chief, Jodie DeJonge.
“This paper takes special pride in writing about some of the toughest issues,” she told Reuters as journalists polished their final articles and office workers packed everything they could into cardboard boxes.
The paper printed only a few thousand copies a day but had a reputation for breaking news about sensitive topics such as corruption, waste, environmental issues and land rights.
Hun Sen defended the deadline given to the paper, saying it had to pay tax like any other business.
“When they didn’t pay and we asked them to leave the country, they said we are a dictatorship,” he said.
Cambodia’s tax department said the paper’s general manager, American Douglas Steele, would not be allowed to leave the country until the tax was paid. He declined to comment.
Independent media, opposition politicians and rights activists have been among casualties of a widening crackdown in the run-up to an election next year in which Hun Sen could face his toughest challenge of more than three decades in power.
During his rule Cambodia has been transformed from a failed state after the genocide of the Khmer Rouge, in which he was once a soldier. But disaffection has grown and the opposition increased its share of the vote in June local elections.
Until recently, Cambodia has had relatively free media compared with neighbours such as communist Vietnam and army-ruled Thailand.
“When The Cambodia Daily is shut down, it means press freedom in Cambodia is finished,” said Chhorn Chansy, a 35-year-old Cambodian who is news editor on the paper. It employed more than 30 journalists, about half of whom were foreigners.
The last edition sold out quickly.
“It’s a sad day,” said regular reader Say Sokny, 36, who had been unable to find a copy.
Eighteen radio stations were also ordered off the air last month and radio stations have been stopped from leasing time to the United States-funded Radio Free Asia and Voice of America.
Hun Sen, 65, has increased his rhetoric against the United States, expelling a U.S. pro-democracy group and on Sunday accusing Washington of conspiring with Kem Sokha.
The Cambodia Daily was founded by American journalist Bernard Krisher in 1993 and Hun Sen this year berated some of its journalists as “servants of foreigners”. The paper said that the paper’s assets would revert to Krisher, who is now 86 and living in Japan.
DeJonge said that the Cambodia Daily had “never taken a penny” from foreign governments or NGOs and just about broke even thanks to advertising, subscriptions and money from Krisher.
“It was already in a perilous financial position,” she said. “The government threats against the paper basically strangled the Daily. There was no money to continue, no money to pay our journalists.” (Editing by David Goodman, Robert Birsel)