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Logo of Phnom Penh Post newspaper Phnom Penh Post - High petrol tax fuels smuggling

High petrol tax fuels smuggling

Ever talented at stymieing investment and in turn keeping the employment prospects

for poor Cambodians bleak at best through unabated and unabashed corruption, officials

have decided to hang tough in their resolve to tighten the noose around the necks

of those struggling to keep afloat.

The always ridiculously high gasoline tax in Cambodia is, when coupled with rising

fuel prices around the world, pushing more of the populace into poverty and providing

a good swift kick to the chops for the large percentage of Cambodians that already

live there.

It doesn't have to be this way. The government in Thailand has long recognized the

benefits to their economy and people in keeping strict control of gas prices and

taxes. Compared to Cambodians, Thai people are in much better financial shape to

handle higher costs for fuel, but any time the government there hints at letting

the price rise by even a fraction of a baht (1 baht equals about 100 riel), Thais

are ready to and regularly do take to the streets in protest.

Here, officials are offended by the thought of their poorer compatriots protesting

gas prices that are a full 33 percent higher than neighboring Thailand.

Revenue experts have said government revenue intake through the gasoline tax would

probably actually increase by lowering the gasoline tax to a level equal to neighboring


This would be due to the elimination of any benefit in bringing in or purchasing

the black-market fuel that is brought into the country in massive quantities from

Thailand and Vietnam.

The Cambodian government takes in no revenue at all from black-market fuel sales,

of course.

There is no black market for fuel in Thailand or Vietnam, as there is no need for


So why are officials dragging their heels in making a long-needed correction in the

gasoline tax that would result in a boost to the economy, the government and the

lives of ordinary working stiffs? Is it the old loss-of-face routine in admitting

to a ridiculous policy, or are there some very influential people making a lot of

money in the black market game?

Matt Jacobson - Phnom Penh



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