Logo of Phnom Penh Post newspaper Phnom Penh Post - Criticism for Cambodia’s tax revenue

Criticism for Cambodia’s tax revenue

Criticism for Cambodia’s tax revenue

120712_07b

Son Chhay, a Sam Rainsy Party parliamentarian, speaks to reporters last year. Photograph: Pha Lina/Phnom Penh Post

Cambodia's tax revenue increased 16 per cent in the first half of this year compared to the corresponding period last year – a rise economists have attributed to improvements in the Kingdom’s economy.

Critics, however, say it amounts to little compared to the national gross domestic product (GDP).

Data from the Customs and Excise General Department shows total tax revenue collected was US$454 million during the first half of 2012, compared with $391 million in the corresponding period last year.

Son Chhay, a Sam Rainsy Party parliamentarian, has criticised the tax-collection system, pointing to the high level of tax leakage and losses.

“We all know that our GDP rose to nearly $15 billion. If we compare that to our present tax collection, it is not equal to 11 per cent of the GDP,’’ he said. “The leakage is still huge – that’s why some high-ranking tax officials have become millionaires."

“They can simply use tax collection as a way to pad their own pockets. Although it rose year-on-year, it does not reflect the real payment or collection.”

Chan Sophal, president of the Cambodia Economic Association, said the rise in revenue had come from tax-collection reforms that had made the collection process more effective.

“I agree with raising our tax collection revenue, because it goes hand in hand with the improvement of Cambodia’s economy – especially the growth of imports,” Chan Sophal said.

He also said the increase in revenue was a result of the increased flow of investment and raw material imports into the Kingdom as Cambodian exports increased.

Hiroshi Suziki, CEO and chief economist of the Business Research Institute for Cambodia, said that so far, the government, especially the Ministry of Economy and Finance, had made big improvements in the efficiency of tax collection.

It had been able to tackle the issue because of the Public Financial Management Reform Program implemented in 2005 and supported by the World Bank.

Olaf Unterroberdoerster, a senior economist for the International Money Fund’s Asia and Pacific department, told The Phnom Penh Post in April that Cambodia had a very low level of tax revenue compared to GDP .

If it wanted to raise funds in a sustainable way for development, investment and education, “it will be necessary to raise the revenue performance of the government so that the expenditure can be financed,” he said.

Chan Sophal said that despite the increase in tax revenue, the government had to try to strengthen tax collection.

“It still has more room to raise revenue,” he said.

To contact the reporter on this story: May Kunmakara at [email protected]

MOST VIEWED

  • Proof giants walked among us humans?

    For years a debate has waged about whether certain bas relief carvings at the 12th-century To Prohm Temple, one of the most popular attractions at the Angkor Wat Temple Complex in Siem Reap province, depicted dinosaurs or some rather less exotic and more contemporary animal,

  • New US bill ‘is a violation of Cambodian independence’

    After a US congressmen introduced bipartisan legislation that will enact sanctions on Cambodian officials responsible for “undermining democracy” in the Kingdom, government officials and the ruling Cambodian People’s Party on Sunday said they regarded the potential action as the “violation of independence and sovereignty

  • Long way to go before Cambodia gets a ‘smart city’

    Phnom Penh, Siem Reap and Battambang will struggle to attain smart city status without adopting far reaching master plans, according to officials tasked with implementing the program. The brainchild of the Association of Southeast Asian Nations (Asean), the smart city program seeks to link up

  • Japan bank buys major stake in ANZ Royal Bank

    Japan's largest bank acquired more than half of ANZ’s shares in Cambodia on Thursday, according to a statement from Kith Meng’s Royal Group. Japan's JTrust Bank, announced that they had acquired a 55% of stake in ANZ Royal Bank. According to a Royal Group