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Logo of Phnom Penh Post newspaper Phnom Penh Post - Millions in auto taxes unaccounted for

Millions in auto taxes unaccounted for

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million.jpg

Increasingly congested Phnom Penh is set for more vehicles.

A relentless demand for automobiles is pumping millions into the economy - but it's

unclear how much revenue is being routed back into promised improvements to an increasingly

clogged and dangerous street system.

Up until 2003, industry officials say, the market for new vehicles was driven largely

by NGOs and foreign embassies, but since 2004 a rapidly emerging middle class has

ensured a sharp increase in demand from Cambodians.

"At the moment our understanding is the total market is a bit over 1,000 vehicles.

In five more years it'll be more than 5,000 units a year," said Ford Division

manager Seng Voueng who added that sales at his dealership had almost doubled compared

to last year

Over the 2005-2006 period Phnom Penh dealership TTHK Toyota sold approximately 450

vehicles. In the first six months of 2007, it had already sold 315. Toyota accounts

for 52 percent of all new vehicle sales and 70 percent of total vehicle sales.

"The demand for new cars keeps growing. We expect that there will be about 10

percent growth continuously on the total new car business," said TTHK Manager

Keo Wathenac.

In 2006 total registered vehicles rose 25 percent to 139,634 from 111,457 the previous

year, and the total number of accidents nationwide rose by 48 percent to almost 10,000

incidents.

Pick-up trucks like Toyota Hilux and Ford Ranger attract a 39 percent import duty

tax, but passenger cars and SUVs such as Camry, Rav4 or Explorer attract an exorbitant

115 percent rate, said Wathenac.

"I'm not sure why the government charges so much tax [on passenger cars]. These

cars don't contribute so much to the growth of the country because they're used by

rich people," said Wathenac.

"[The government] saw these people are very rich, they can buy lots of goods...so

the tax is used to get some income from those people."

Such figures suggest the government is in store for a windfall from import taxes.

Even by conservative estimates more than $10 million is being collected annually

through vehicle taxes but, as Phnom Penh's streets struggle to cope with the increased

traffic, it is unclear how much of that money is being directed back into roads,

infrastructure and traffic control.

Despite numerous attempts by The Post, neither Ministry of Economics and Finance

nor Ministry of Public Works and Transport representatives were willing to comment

on the amount collected annually in vehicle taxes, licence fees and tolls or how

much is spent on the roads within Phnom Penh.

In May the Government announced it would be investing more than $2.5 billion to develop

the national road system between now and 2025, to be partially funded by loan and

aid packages.

Meanwhile, the job of enforcing laws and ensuring safety on the roads falls to Phnom

Penh's 300 traffic police, who work 12 hour days for about $45 a month.

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