Tax revenues exceed target pace
Tax revenues exceed target pace
The Ministry of Economy and Finance’s General Department of Taxation (GDT) collected 879.68 billion riel ($217.2 million) in tax revenue last month, down 77.08 billion riel or 8.06 per cent compared to 2020, it said in a February 15 press release.
This comes even as tax collection from the three main sources of revenue – “income”, “payroll” and “special” – enjoyed year-on-year gains, with economists quick to peg the decline on government policies granting preferential treatment for sectors that face severe ongoing distress from the Covid-19 crisis.
Still, last month’s figure accounts for 9.68 per cent of the 9.08442 trillion riel annual target – well over one-twelfth, GDT said.
Broken down by category, income tax made up the largest share of revenue last month, raking in 173.79 billion riel (up 7.26 per cent year-on-year), followed by payroll tax (91.31 billion riel, up 10.07 per cent) and special tax (77.10 billion riel, up 5.53 per cent).
GDT director-general Kong Vibol told online media outlet Fresh News that January’s tax revenue numbers had not decreased month-on-month and that this year’s collection level is poised to be slightly higher than in 2020.
“The decline in tax revenue over the first month was due to the [new] Covid-19 cases as well as the overall economic situation,” he said.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia, told The Post on February 16 that the government’s preferential schemes for the Kingdom’s more embattled sectors were the root causes of last month’s underwhelming tax-collection performance.
He dismissed concerns that tax collection would impose a significant burden on government revenue, contending that the state is fully aware of the economic situation and the circumstances surrounding it.
“This dip in revenue is related to the government’s tax-easing policies. I do not think this is a concern,” he said, writing off opinions that suspensions and closures of businesses had played a larger role.
He instead called for greater attention to the three main sources of tax revenue, which he stressed are benchmarks for domestic consumer demand and employment rate.
“In view of the current situation and the introduction of the government policies, I don’t think this year’s revenue collection will be all that different from 2020.
“However, if the government can effectively control the collection of taxes in some key sectors, [such as construction and real estate], revenue collection in 2021 may increase slightly compared to last year,” Vanak said.
GDT collected 11.70052 trillion riel in tax revenue last year, up 423.20 billion riel or 3.73 per cent compared to 2019, it said in a press release issued on January 11, 2020.
