GDT, GDCE revenues top $1.9B, pass 30% of 2023 goal
GDT, GDCE revenues top $1.9B, pass 30% of 2023 goal
The finance ministry’s taxation and customs departments collectively netted $1.908 billion in revenues in the first quarter of 2023, marking just over 30 per cent of the full-year target, official figures show.
Individually, the General Department of Taxation (GDT) reported that it collected $1.34390 billion in the January-March period, or 37.63 per cent of its $3.5717 billion full-year target. An earlier GDT notice put the first quarter 2022 figure at $1.26307 billion, which would suggest a 6.40 per cent increase on an annual basis.
At the same time, the General Department of Customs and Excise of Cambodia (GDCE) registered $564.1 million for the three-month period, representing just 20.5 per cent of its full-year target, albeit a 5.2 per cent year-on-year drop.
Accounting for rounding, this indicates that GDCE revenues during January-March 2022 fell in the range of $594.675-595.409 million, indicating a slight reduction from the $597.6 million earlier reported for that period.
The full-year targets are set in the 2023 Law on Financial Management.
Speaking to The Post on April 18, Hong Vanak, director of International Economics at the Royal Academy of Cambodia, credited the increase in these tax-linked revenues to the Kingdom’s strong economic performance and an influx in new investment projects.
The government can use the funds to develop the country as well as to help people and businesses when faced with serious problems, he explained, predicting that Cambodia’s economic expansion will ensure that GDT and GDCE revenues collectively remain in positive growth territory, barring any force majeure.
On the other hand, Vanak tied the GDCE’s reported year-on-year dip in revenues to higher production and transportation costs as well as raw material, fuel and energy availability issues triggered by global production and supply chain disruptions fuelled by geopolitical conflicts, the Russia-Ukraine war, Covid-19 and other ongoing crises.
“Nearly every” producer has felt the squeeze as a result of all of these causes, he stressed. “When production chains around the world are not running smoothly and economic growth is low, orders will fall. As cross-border orders decline, so too will Customs revenue.”
Cambodia Chamber of Commerce (CCC) vice-president Lim Heng commented that the GDT’s positive first-quarter results signal that local businesses and production are doing well, more than a year on since the Kingdom’s economic reopening.
Given the current levels of business and service activity in the Kingdom, “I believe tax collection will be better than it was in 2022”, he said, pointing out that more direct investment would generate additional revenues for state coffers.
The finance ministry reported that the Council for the Development of Cambodia (CDC) last year approved 132 private investment projects outside of the Kingdom’s special economic zones (SEZ), worth a total of $3.23 billion, which were expected to create about 0.122 million jobs.
These figures respectively mark year-on-year increases of 22.22 per cent from 108 projects, 87.9 per cent from $1.719 billion, and 35.9 per cent from 0.09 million jobs, as indicated by the ministry’s Socio-Economic Trends reports for 2021 and 2022.
Early this year, Prime Minister Hun Sen reported that the GDT and GDCE collectively netted about $6.145 billion in revenues last year, handsomely surpassing the annual target and marking a significant recovery following Covid-19-driven declines.
The premier was speaking at a groundbreaking ceremony for a Mekong River bridge and connecting road in Kratie province on January 2.
The GDT and 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 2022 Law on Financial Management, he noted.
For reference, the GDT and GDCE had 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 exceeded its full-year target by 24.02 per cent, the latter fell a bit short, at 97.1 per cent of its goal.
Hun Sen argued that the commendable revenue collection performance of the two agencies 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.
In early April, the Asian Development Bank (ADB) announced that it had pegged Cambodia’s economic growth rate for 2023 at 5.5 per cent, largely driven by the tourism sector, which it predicted would grow 7.3 per cent this year.
