Capital Reports Dramatic Jump in Tax Revenue

The Phnom Penh Municipal Tax Department announced Tues­day that it collected twice as much tax revenue in January and February as it did in the same two months of 2005.

The municipality released its an­nual tax report at a meeting in Chak­tomuk Theater. According to the report, Phnom Penh collected $1.6 million in the first two months of this year, up from about $700,000 in the first two months of last year.

“During the first two months, the tax collection increased dramatically: This is because we en­forced the laws,” said Om Chan, mu­nicipal tax department director. “We collected taxes with trans­­parency.”

He added that the largest in­creases came from collecting taxes on land sales, on unused land and from business licenses.

“I hope we can collect 15 percent to 20 percent above the state’s forecast, but I cannot guarantee it will be doubled by the end of the year,” he said.

Overall, the municipality collected $7.8 million in 2005, up from $7.1 million in 2004, according to the report.

In the first two months of this year, $28 million in tax revenues was collected nationwide, the re­port states. But it gave no com­par­ative national figure for the first two months of last year.

“This is good news,” Interna­tion­al Monetary Fund Represent­a­tive John Nelmes wrote of the in­crease in an e-mail Tuesday, add­ing that data he has seen from other provinces indicates increases similar to Phnom Penh’s.

“I would agree that enforcement has strengthened,” he said. “The rise also reflects the buoyant level of economic activity, as business license revenues have risen.”

Increased revenue from property sales taxes may reflect pro­gress in awarding land titles in Phnom Penh, he said.

Finance Ministry Deputy Tax De­partment Director Keo Savuth in­structed municipal tax officials not to abuse their powers at the meeting.

“If you collect at a rate lower than that stated in the law, collect more. If you collect exceeding that stated in the law, return the money to the people,” he said. “Don’t use improper words with people…. We must make it convenient.”

But at Phnom Penh’s Olympic Mar­ket on Tuesday, sellers said tax officials continue to overcharge.

“They ask for [$7] or more a month, but the receipt only says [$2.30],” one 48-year-old drinks vendor said on condition of an­o­nymity. “They also want to in­crease it to [$12] but then I will pro­­test,” the seller added.