Minister of Finance Keat Chhon says the budget for salaries will be increased to boost standards of living
Photo by: Kay Kimsong
Finance Minister Keat Chhon speaks to reporters at a news conference in this file photo.
THE government plans to up spending on civil servant salaries by about US$60 million per year to $360 million starting January 2009, Finance Minister Keat Chhon told the Post Tuesday.
"We will dig up all buried treasure from different ministries and institutions to collect more money to support our action," Keat Chhon said, adding that better revenue collection by the government would free up additional finances to fund the spending.
Keat Chhon said that higher tax revenues will allow the government to increase salary spending by 20 percent every year to improve the standard of living of government workers and other civil servants.
But Rong Chhun, president of the Cambodian Independent Teachers Association (CITA), said the salary increases still fall short of civil servants' needs.
"I think the increase is good, but the raises should at least match the rate of inflation if they really want to respond to the exact need of our civil servants," Rong Chhun said.
We will dig up all buried treasure from different ministries and institutions to collect more money.
Cambodia's government salaries are about $35 per month, which is barely above the poverty line. Teachers can earn considerably more, but CITA is pushing for monthly salaries of over $100.
International institutions also say the low salaries encourage corruption and poor governance, and have pressed the government to raise pay levels.
Government revenues have risen this year with a strong economy in the first half of the year, Keat Chhon said, increasing the likelihood of pay rises.
The Statistics General Headquarters of the National Treasury said that overtime salary spending would double from $12 million per month in 2002 to about $25 million in the third quarter of 2008.
Opposition lawmaker Son Chhay applauded the government's announced salary increase, but warned that officials should focus on reducing corruption in the tax collection system.
"We really support the strengthening of the government capacity in collecting tax in order to enhance the paying of salaries for civil servants. But to get an accurate idea of how much the government is collecting, the government should adopt a minimum income law, to ensure better tax collection," he said.
He also urged the government to tax agricultural exporters to encourage products to be sold locally.
"The government should collect tax from large farmers who export agricultural products if they want to encourage local products to be produced more," Son Chhay said.
Son Chhay added that 35 percent to 40 percent of taxes have been siphoned off by corrupt officials because the government does not have a mechanism to audit expenses.
"I think that to ensure accurate expenses, the government should collect at least 15 percent of the gross domestic product, not only nine percent like now."
In 2007, Cambodia collected more than $600 million in tax revenues.