Cambodia clocks April revenue of $508 million
Cambodia clocks April revenue of $508 million
In April, the Royal Government of Cambodia collected 2,090 billion riels ($508 million) in revenue, which is equivalent to 7.15 percent of the 2024 annual budget expectation, as per data published by the Ministry of Economy and Finance.
Cambodia’s April revenue of 2,090 billion riels ($508 million) came 88 percent from tax, 0.8 percent from grants and 10.3 percent from other revenue sources. In absolute numbers, the revenue split of 2,090 billion riels ($508 million) in revenue – 1,857 billion riels ($451 million) was revenue from taxes, 17 billion riels revenue from grants ($4.3 million) and 216 billion riels ($52.5 million) revenue from other sources.
Compared to last month’s performance, the government’s revenue has decreased by 33 percent. In a statement, the government attributed the revenue decline to lower income tax revenue by 56.82 percent, lower revenue from sale of goods and services of 9 percent and lower taxes from international trade of 4 percent.
“Changes in tax policies as well as the impact of FTAs reduced tariff rates or eliminated tariffs on certain products which can reduce government revenue from import duties, especially lower automotive imports means less revenue generated from tariffs and other import-related taxes imposed on these vehicles,” Dr Chey Tech, socio-economic research and development expert, Dynamic Alliance Consulting (DAC), told Khmer Times.
The lower taxes from international trade are to be expected as per the World Bank. In a recent report this February, the World Bank said, “Cambodia forfeits nearly a third of its potential revenues from imports as a result of tax exemptions. While free trade agreements will naturally result in the decline of revenues from customs, ineffective incentives can result in further decline of revenues without substantial gain in economic growth.”
The April decline in revenue is to be expected as the government is operating under a challenging environment. In a recent statement, the General Department of Customs and Excise Director General Kun Nhim said the government has seen many challenges in revenue collection, including the decline in automotive import, which has been a major source of revenue for the government.
GDCE data shows a 7.2 percent decrease in vehicle import tax revenue from January to May 2024 compared to 2023 indicating a decline in car imports, potentially due to local production growth and changes in tax policies.
On the positive side – this slower revenue from imports, can also be attributed to the growth of domestic production instead of relying on imports, which in the long term can mean a Cambodian economy that is more self-reliant and independent, said market participants.
“In addition, in early 2023 the Cambodian government offered a significantly lower import tax on electric vehicles (EVs) is around 50 percent lower than that on traditional vehicles can be subject to an import tax as high as 120 percent as part of a larger Cambodian government initiative to encourage sustainable transportation, reduce air pollution, and reduce dependence on fossil fuels, said Chey Tech, adding, “An increase in the local production of goods, especially recently localized many automotive companies that were previously imported is leading to a decrease in imports and a reduction in government revenue from import duties. However, the growth of local production is good stimulating economic growth, creating jobs, and increasing corporate taxes and income taxes.”
But this April 2024 revenue of 2,090 billion riels ($508 million) – which is equivalent to 7.15 percent of the 2024 annual budget expectation — might be an indicator that the government might meet its annual budget target; or even if it falls short only fall short by a small margin, said industry insiders. Last year, the government did not meet its target. In 2023, the revenue collected was about $2.28 billion, a decrease of 15.7 percent compared to the revenue in 2022. This resulted in Cambodia meeting only 82.4 percent of the target plan set by the Financial Law for 2023 management.
For April, the Cambodia government saw its revenue from grants increase by 193 percent and revenue from other sources increase by 9.3 percent. This increase in miscellaneous income was due to a 235 percent increase in state property income.
When comparing the April 2024 figure to March 2023 numbers, the government’s revenue decreased by 17 percent; and revenue from other sources increased by 24 percent.
