Falling Revenues Tied to Halt in Pre-Inspection Termination Linked to Revenue Decline

An International Monetary Fund delegation and other ex­perts are examining whether there is a correlation between the absence of an independent im­port shipment inspector and a decline in customs tax collection.

Furthermore, officials are trying to find out why there is a discrepancy between Ministry of Finance figures and customs department figures.

The concern is that lower revenue may signal that smuggling or other forms of corruption have increased.

Chanpen Puckahtikom, head of the IMF delegation and assistant director for Asia and Pacific, stressed Thursday that no conclusion has been made yet.

“We need to look at the discrepancy [in figures] first,” Puckahtikom said after an IMF meeting with customs department officials. The IMF, which recently re-engaged in Cam­bodia, has long urged Cambodia to improve its tax collection.

According to a Finance Minis­try preliminary budget report, tax revenue collected by the customs department has declined since July when Societe Generale de Surveillance suspended its major inspection operations because it was owed millions of dollars by the government.

The Ministry of Finance officially terminated the contract with Swiss-based SGS in late November after reaching an agreement on settling a $6.8 million debt.

Puckahtikom said the government is on the right track in its plans to reinstall an independent inspection system.

But a new inspection firm isn’t expected to be selected until Febru­ary with operations scheduled to start in April.

The Finance Ministry budget report shows that customs revenue typically ran from $18 million to $21 million a month. But it has slipped from $17.4 million in August to just $12.4 million in October.

The Customs department, how­ever, shows higher figures, such as revenues of $16.9 million for October. An economist in Cambodia said Wednesday he suspected the absence of SGS inspection services has caused a decline in customs tax collection.

“Normally economic growth brings more consumption of goods, more customs duties and more tax revenues,” the economist said on a condition of anonymity. “But the figures are declining. It’s very hard to say, but there might be some correlation.”

Son Chhay, a Sam Rainsy Party parliamentarian, said a National Assembly committee visited the Sihanoukville Port last month and heard many complaints from businessmen about an increase in smuggling. The businessmen complained that they could not compete with those who brought goods without going through proper channels, he said.

However, Customs Deputy Director Kun Khem defended his department’s figures, which he said show only a slight, “seasonal decline.”

“Usually in the rainy season, the number of imports decreases,” Kun Khem said. “For example, construction slows down and people consume less. That’s why the figures in August and September declined slightly.”

 

 

Related Stories

Latest News

The Weekly DispatchA new weekly newsletter from The Cambodia Daily delivering news, analysis and opinion to your inbox. Published every Friday at 11:30am. Sign up today.