Budget Data Reveals Increase in Tax Revenue

Although the ministries of health, education and rural deve­lo­p­ment had still underspent by De­­cember, they spent considerably more of the money they were allocated in the 2004 budget law than they did in 2003, according to Min­istry of Economy and Fi­nance provisional figures for the period ob­tained Monday.

Though the Ministry of Interior spent a higher percentage of its al­lo­cated budget than the social ministries in 2004, it did not drastically overspend as it did in 2003, ac­cording to the data.

The statistics—covering Jan­uary to December 2004—also show that the government generated about $27 million more in tax revenue than the $366 million it had aimed for in the budget law. The data show a vast im­prove­ment on 2003, when the government collected about $48 mil­lion less in taxes than the $354 mil­lion it had sought.

“The [figures] are a very positive sign,” said Kang Chandara­rot, executive director of the independent Cam­bodia Institute of De­velop­ment Study.

“There is an obvious improvement in revenue collection and [the government has] also im­proved in [its] spending policy,” he said.

“Maybe it reflects the engagement of donors in reforming the Min­i­stry of Economics and Fi­nance and also spending discipline in key ministries,” he added.

By December 2004, the Health Ministry had spent about 84 percent—or $48 million—of the $56.6 million it was allocated, ac­cording to the data.

By December 2003, the ministry had only spent about 59 percent of its annual budget.

Provisional figures obtained earlier this month detailing spend­ing for the 11-month period from Jan­uary to November 2004 showed that the Health Ministry had only spent 35 percent of its an­nual budget.

Those figures, which are dated Jan 12, may have been compiled too fast to be accurate, Kang Chan­­dararot said.

By December, the Education Min­istry had spent about 92 percent—or $81 million—of the $88 million it was allocated, according to the figures.

In 2003, the ministry spent about 79 percent of its budget.

“The ministries of health and education get a large increase [in funds] every year,” Hang Ch­houn Na­­ron, secretary-general of the Min­istry of Economy and Fi­nance, said Monday.

By December 2004, the Min­istry or Rural Development had spent about 70 percent—or $4.1 million—of the $5.8 million it was al­­located, according to the data. The previous year it spent only about 54 percent of its budget.

The Interior Ministry, which spent 167 percent of its budget during 2003, had spent only about 97 percent of its budget—or $41.8 million—by December 2004.

The Ministry of Defense had spent about 98 percent—or $68 mil­lion—of the $69 million it was al­­located by December 2004.

Kang Chandararot said the im­provement in tax collection was a very good sign for the country.

Prime Minister Hun Sen’s de­sire to address tax collection prob­lems was revealed in De­cem­ber, when he fired the director of the Finance Ministry’s tax de­partment, Hong Tha, and of­fered incentives to those who ap­prehend smugglers, Kang Chan­d­ararot said.

“Something happened during last year, which is especially obvious in the activities of officials from the tax department, customs officials and also the economic po­lice, in cracking down on smuggling,” Kang Chandara­rot said.

Kang Chandararot said he be­lieved the figures were an accurate reflection of reality and had not been manipulated.

But opposition lawmaker Son Chhay called the statistics in­to question, noting that serious un­­derspending has been a problem at key ministries since before 1993.

“They adjust [the figures] just to look good,” Son Chhay al­leged.