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More work needed at the tax dept, JICA says

More work needed at the tax dept, JICA says

The General Tax Department of Cambodia (GTD) needs to improve a number of administration processes to enhance revenue collection and make a greater contribution to the economy, a recent study released yesterday by Japan International Cooperation Agency (JICA) reveals.

Speaking at a workshop on the modernisation and automation of tax administration yesterday, Izaki Hiroshi, chief representative of Japanese development agency JICA, said that while Cambodian tax revenues have increased year on year, the amount is still well below the country’s potential.

“In order to meet the needs of the Cambodian people for better quality of public services – such as health, education, water, electricity – we need to improve the tax system, tax administration and tax policy,” he said.

Hiroshi said both technology and business processes needed improving to improve revenues and help fund social spending.

“A solid fiscal base sustained by tax revenue is the foundation to provide good quality of public services to the people,” he said.

Yesterday’s meeting covered a wide range of issues, from taxpayer registration, tax filing and auditing. The workshop forms part of a joint project between JICA and the GDT to improve business practices at the tax department.

According to Son Chhay, a parliamentarian from the opposition Cambodia National Rescue Party (CNRP), Cambodian tax revenue contributes to about 10 per cent to the country’s GDP, far below neighbouring Vietnam and Thailand whose revenues account for closer to 20 and 30 per cent of GDP respectively.

“Our revenue is lower because we don’t have the clear collection mechanism, so tax officials have the chance to be corrupt,” he said. “What we can do to improve, is we should make a computerised system so that they can record everything.”

According to data from GTD, Cambodia received $443 million in tax revenue during the first five months this year, an increase of 12 per cent from $394 million in the corresponding period last year.

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