Customs Revenues Drop 17 Percent in July

Customs revenues in July dropped 17 percent from June, and officials continued to warn the country faces a serious budget shortfall.

About $9.7 million was collected in July, compared to $11.8 million the previous month, Cus­toms Director In Saroeun said.

He blamed the drop on the reluctance of businesses to im­port goods during the elections, and cited the continuing problem of smuggling. But even illegal cross-border trade ap­peared to slow in July.

“Maybe the smugglers were considering political stability,” In Saroeun said.

Government revenue from other sources is also down for the first half of the year, with officials again blaming smuggling as one of the main reasons.

The two prime ministers last month warned the country was facing a budget crisis, and a sen­ior government economic ad­viser agreed on Tuesday the revenue shortfall poses a serious threat.

“There will be a budget crisis,” he said. “The budget is in bad shape.”

The adviser said the government is trying to cut unnecessary spending, such as travel, in order to make ends meet. Funding priority is on salaries, debt payments and counterpart money for development projects.

Finance Cabinet Director Sara­khan said with the elections over the government should have enough money to meet expenditures.

Customs revenues accounted for 42 percent of the overall revenue between January and March. The country’s continued failure to broaden its revenue base is a major criticism from the international community.

Last month, to curb smuggling in areas such as Pailin and Ban­teay Meanchey, the prime ministers called for better cooperation between local authorities, police and military to stop tax collectors from colluding with smugglers.

In Saroeun said more inspections were taking place at border points, but the crackdown has not been 100 percent successful. He said the problem is particularly bad with loggers, who are often protected by armed men. He was unsure how much money is be­ing lost through unpaid logging customs revenues, but said it was substantial and difficult to stop.

According to the Ministry of Finance’s Economic Unit, only $800,000 was collected from logging during the first quarter of 1998, down nearly 50 percent from the same time in 1997.

Overall, the customs department collected $25 million during the first three months of this year, compared with $25.6 million during the same period in 1997.


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