Tax revenue falls in first 8 months of ‘23: ministry
Tax revenue falls in first 8 months of ‘23: ministry
In the first eight months of 2023, the government reported revenue of almost $4.2 billion, representing nearly 66% of the target set for 2023 by the annual budget law. This performance marks a decline of over 2% compared to the same period last year, as per the Ministry of Economy and Finance.
The ministry’s Financial Statistics Report for August detailed the revenue composition.
The Budgetary Central Government’s (BCG) revenue collection reached 17.308 trillion riel (about $4.19 billion). Of this, tax revenue accounted for 14.738 trillion riel ($3.57 billion) or 85.15% of total revenue.
Grants stood at 899 billion riel ($217.76 million), or 5.2%, and other income totalled 1.671 trillion riel ($404.76 million), contributing 9.65%.
When compared to 2022’s data for the same period, tax revenue fell by 2.75%, grants dipped by 21.99% and other revenues saw an increase of 22.88%.
The BCG’s expenditure execution totalled 18.782 trillion riel ($4.55 billion) during the eight-month period, equivalent to 57.11% of the 2023 budget.
This includes expenses of 13.537 trillion riel ($3.28 billion) or 72.07% of the total, and a net acquisition of non-financial assets amounting to 5.246 trillion riel ($1.27 billion) making up the rest.
This signifies an increase of 17.01% in expenditure from 2022, with expenses growing by 14.04% and net acquisition of non-financial assets surging by 25.40%.
The budget execution for the first eight months of 2023 showed a deficit of 1.474 trillion riel ($356.96 million). In contrast, 2022’s corresponding period boasted a surplus of 1.616 trillion riel ($391.81 million).
“The slow revenue performance paired with rapid expenditure has resulted in a budget deficit of roughly 124 billion riel ($30.05 million), which is about 22.19% of the annual projected budget deficit. This deficit in 2023 led to a debt increase of approximately 3.332 trillion riel ($807.43 million) and a rise in net acquisition of non-financial assets by about 1.859 trillion riel ($450.46 million),” the report stated.
Hong Vanak, an economics researcher at the Royal Academy of Cambodia (RAC), told The Post on October 23 that taxes and royalties are the primary national income sources. He attributed the recent drop in revenue to the global economic downturn affecting exports, imports and some domestic production chains, especially within the tourism sector.
Despite the decreasing revenue performance, he remains confident that the Cambodian economy will not be severely affected.
“With nearly three months left in 2023, it’s premature to predict whether this year’s revenue will continue its decline or experience some recovery,” he said.
However, he voiced optimism for 2024, expecting conditions to improve from this year.
In recent forecasts, the International Monetary Fund (IMF) projected Cambodia’s economic growth to reach 5.6% in 2023 and 6.1% in 2024. The World Bank’s prediction for October set the figures slightly lower at 5.5% for 2023 and aligned with the IMF’s 6.1% for 2024.
