The customs and tax agencies collected $6.145 billion in revenues last year, surpassing the annual target and marking a significant recovery following Covid-19-driven declines, according to Prime Minister Hun Sen on January 2.
The premier was speaking at a groundbreaking ceremony for a Mekong River bridge and connecting road in Kratie province.
He revealed that the General Department of Taxation (GDT) and General Department of Customs and Excise (GDCE) respectively collected $3.455 billion and $2.690 billion last year, passing their targets by 22.54 per cent and 4.94 per cent, as set in the Law on Financial Management for 2022.
For reference, the GDT and GDCE reported their 2021 revenues at $2.78192 billion and $2.2952 billion, down 3.7 per cent and 5.1 per cent over 2020. Although the former surpassed its annual target by 24.02 per cent, the latter fell slightly short, at 97.1 per cent of its goal.
Hun Sen argued that the commendable revenue collection performance of the two agencies – which are under the Ministry of Economy and Finance – lends credence to the prediction that the Kingdom’s gross domestic product (GDP) grew by 5.5 per cent last year.
The jump in these revenues, following a Covid-19 downturn, came amid signs of renewed progress in all areas in Cambodia, he said, forecasting that GDT and GDCE revenues will both exceed their 2023 targets.
“[During Covid-19], we spent more than we earned – revenues fell as the need for [public] expenditures rose. But now we start anew” with more funds from the agencies than expected, the premier added.
Speaking to The Post on January 2, Hong Vanak, director of International Economics at the Royal Academy of Cambodia, remarked that the on-year increases in GDT and GDCE revenues signal a new stage of economic recovery, especially in terms of investment, domestic business and international trade.
The government can use these funds to – among other things – develop the country, repay debts, or as reserves in the event of force majeure, such as another Covid-like crisis, he said.
With the government potentially rolling back Covid-era tax breaks, the two agencies will most likely collect considerably higher revenues this year compared to 2022, he suggested.
In a December 7 statement, the World Bank also affirmed that it had maintained its 2022 economic growth forecast for Cambodia issued in September, at 4.8 per cent, predicting that this would accelerate to 5.2 per cent next year “as increased hiring supports rising domestic consumption and as inflation recedes”.