Tax, customs revenue passes $4B in first nine months
Tax, customs revenue passes $4B in first nine months
The Ministry of Economy and Finance’s taxation and customs departments earned $3.810 billion in revenue in the first nine months of this year, declining by 6.4 per cent year-on-year as the prolonged Covid-19 crisis continues to undermine collection efforts.
In the January-September period, the General Department of Customs and Excise (GDCE) reported $1.6991 billion in revenue, down by 6.8 per cent year-on-year, and the General Department of Taxation (GDT) logged $2.11109 billion, falling by 6.05 per cent year-on-year.
Cambodia Chamber of Commerce vice-president Lim Heng attributed the decline to the closures of businesses deemed to be high-risk, in a gambit aimed at cutting off the routes of Covid-19 transmissions in the community.
He told The Post on October 17 that the reduction in the volume of business activity led to overall muted commercial activity, catalysing a drop in revenue from product imports and other taxes and processing fees.
“The decline in state revenue in the aforementioned period is due to the February 20 community event, which has triggered an increase in Covid-19 infections. Accordingly, business activity has dwindled,” Heng said.
He observed, however, that economic activity in Cambodia has started a gradual recovery path, in what he said was a result of government efforts to combat Covid-19 and the relative success of vaccination campaigns.
The Ministry of Health on October 16 issued Notification No 453 on revised health rules, quarantine requirements and other travel conditions.
The new provisions are widely expected to play a significant role in drawing in more foreign investors to the Kingdom in search of lucrative economic opportunities, made all the sweeter by recently-approved bilateral and regional free trade agreements and laws in the realm of investment.
Heng went on to say: “Business activity in Cambodia is starting to pick back up. Reducing the duration of the required quarantine will make it easier for more investors to travel to Cambodia.
“And the increased investment will not only create jobs for the people, but also help the state collect more tax revenue.”
Hong Vanak, director of International Economics at the Royal Academy of Cambodia, ascribed the dip in tax and customs revenue to, inter alia, a decline in import and export volumes, a slump in business activity, Covid-driven tax breaks, inaccurate business register data concerning type and size, and “misbehaviour” among taxpayers.
“The reopening of the economy will help ratchet up tax collection, which is an important source of revenue for the government to use and develop the country in all areas,” he said.
In 2020, the GDCE and GDT collected $5.309 billion in revenue. The GDCE accounted for $2.4196 billion, down by 24.8 per cent year-on-year, and the GDT $2.88902 billion (11.70052 trillion riel), up by 3.73 per cent year-on-year.
