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Logo of Phnom Penh Post newspaper Phnom Penh Post - Tourism revenues increase but taxes remain flat

Tourism revenues increase but taxes remain flat

Overall revenue from Cambodia’s booming tourism sector reached $2.5 billion last year, according to Tourism Minister Thong Khon.

Khon said in an interview on Tuesday that the figure, which does not reflect the amount the state collected in taxes on the sector, marked a 15 per cent increase compared with the revenue accumulated in 2012.

“It is gross national revenue, meaning what the visitors spent on everything, like restaurants, food, housing, meals, transportation, souvenirs,” he said.

Khon referred questions about tax dollars from tourism to the Ministry of Economy and Finance. Officials there could not be reached for comment on Tuesday or yesterday.

Son Chhay, senior lawmaker with the opposition Cambodia National Rescue Party, claimed yesterday – as he consistently has in the past – that while gross revenue from tourism keeps increasing, government coffers aren’t as full as they potentially should be.

“We see that the income put into the state budget is just a small amount,” he said. “We should have earned at least $500 million for the state budget. In general, the report from the Ministry of Economy and Finance shows that income for the state is under $40 million – that’s the problem.

“This is an important sector; I believe that no less than $100 million per year has been spent improperly and the government also gets more in informal income,” Chhay added, referring to unofficial payments that commonly occur in the tourism industry.

The tourism sector provides the government with several ways to collect money, he said, including the use of value added tax (VAT), service charges at hotels and restaurants, and taxes from booking trips at resorts.

Ang Kim Eang, the president of Cambodia Travel Agencies and owner of Great Angkor Tour, said all the tourism agencies in Cambodia are required to fork over percentages of their profits based on the type of license under which they are registered.

For him, “a withholding tax of one per cent and 10 per cent of value added taxes are to be paid every month, and additional taxes are paid annually”.

Eang said he believes that the government uses the extra income from tourism to promote the sector and increase income.

Sok Chanmony, president of the Cambodia Bus Association, said 10 per cent of all bus ticket fares go to the state, as well as other taxes. Still, he has no idea how the money is used or where it goes. “It should be in the government’s budget,” he said.

More than 3.5 million people visited Cambodia last year, compared to about three million in 2012, according to the tourism minister.

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