Tax revenue of $2.3b meets nearly 65% of GDT target
Tax revenue of $2.3b meets nearly 65% of GDT target
The continuous reform of tax procedures and understanding taxpayers have helped the tax revenue increase steadily, industry observers say.
In the first seven months of 2023, the General Department of Taxation (GDT) collected more than 9.4 trillion riel ($2.3 billion) in tax revenue, an increase of 4.7 per cent from $2.2 billion in the same period last year, it said in a report on August 17.
The $2.3 billion sum is equivalent to 64.8 per cent of the 2023 projection under the Law on Financial Management.
The GDT has set $3.6 billion as its target for total tax revenue under the Law on Financial Management for 2023.
For July 2023, GDT collected $240.4 million, equivalent to 6.7 per cent of the Law on Financial Management for 2023, and is a marginal increase from $239.5 million in July last year.
In a meeting where the report was highlighted, GDT director-general Kong Vibol said although there is tax revenue growth, uncertainty in the context of global economy and geopolitical problems, especially the Russia-Ukraine war crisis, continues to impact companies and countries, which are the source of capital for large investments in Cambodia.
“Rising inflation might be a risk in managing tax revenue, as it might not meet the [projection under the] Law on Financial Management for 2023, particularly the basis on which forecast plans are made next year,” he said.
Hong Vanak, an economics researcher at the Royal Academy of Cambodia, told The Post on August 17 that increased tax revenue means that economic and business activities in the country are progressing well. “If businesses close, tax revenue or internal tax would also decline.”
The increase in tax revenue is due to GDT’s continuous efforts in disseminating information and revising tax procedures, which has made the private sector aware of their tax obligations.
Vanak said tax revenue is an important source of funds for governments to develop their country whether through the training of human resources, building public infrastructure or to entice national and international investors to invest.
“Although the tax revenue now [January to July] has not increased much compared to the same period in 2022 and [in terms of the target under] the Law on Financial Management for 2023, it does not matter as the global economy is not very good at the moment,” he added.
Since the beginning of 2023, Cambodia has received a series of new investment projects and once the projects go online, tax revenue would “definitely increase”.
That being said, he urged GDT to double down efforts to make revenue collection more efficient and transparent, especially in the real estate sector with regards to the construction of tall buildings and the “types of land not used”.
Cambodia Chamber of Commerce (CCC) vice-president Lim Heng echoed that procedures and money from tax revenues in Cambodia are bearing results.
He said that when the Cambodian economy progresses, local tax revenue would increase in the future.
“Participation in the implementation of tax obligations in Cambodia is on a good path as tax revenue has been rising,” he said.
