The government collected about $1.3 billion in tax revenue in 2015, a 21.67 percent increase over the previous year, according to a statement released by the Ministry of Economy and Finance’s general department of taxation on Monday.
The total tax revenue increased by $232.2 million from approximately $1.06 billion in 2014, according to the statement.
“Within this, corporate profit tax and salary tax rose 27.2 percent and 18.6 percent, respectively,” it said.
According to the statement, Chou Vichith, a secretary of state at the Finance Ministry, urged officials to build on recent improvements in tax collection—following the launch of a new taxation strategy last year—by casting the tax net wider to petty taxpayers, including household businesses, which are currently falling through the net.
“In order to collect tax revenue that sufficiently responds to the budget law for 2016…[we] have launched measures to…simplify the accounting documents for petty taxpayers,” the statement said.
Preap Kol, executive director of Transparency International Cambodia, praised the government’s efforts and added that policies to increase collection from petty taxpayers and small and mediumsized enterprises (SMEs) by improving the clarity of tax forms should help to boost revenue.
“We believe the [corporate profit] tax can still go up higher once all business owners including SME’s fully comply,” Mr. Kol said. “When transparency and anti-corruption measures are undertaken, it translates to an increase…in tax [collection].”
Despite the increase in tax revenue last year, Srey Chanthy, an independent economist, said tax revenue still only amounted to less than 10 percent of Cambodia’s gross domestic product (GDP), and that the government had to raise more in order to reduce its borrowing.
“Even though the government has collected more tax revenue, it is still little compared to GDP,” Mr. Chanthy said. “More tax revenue would allow the government to reduce how much it borrows.”
At the end of last year, the National Assembly approved an increase in the government’s public borrowing to about $960 million for 2016—up from $822 million in 2015—to help fund this year’s budget.
© 2016, All rights reserved.