The government has failed to meet its revenue target for the first three months of 1998, a Finance Ministry official said Thursday.
Chhay Than, undersecretary of state for the ministry, said revenues fell 2 percent short of the government’s first-quarter target because of an increase in smuggled goods across Cambodia’s border, making customs revenues lower than expected.
In addition, Chhay Than said foreign investment and imports were lower than anticipated.
The government has set a target of $286-287 million in revenue for 1998.
But funds collected in the first quarter of the year came up short of the 25 percent projected, Chhay Than said.
“Hopefully the second quarter will be better, but it will depend on the political situation after the election. Investors are taking a wait-and-see approach,” Chhay Than said.
Cambodia’s economy is heavily reliant on revenues from customs, which last year accounted for about 65 percent of total government revenues.
Economists have repeatedly urged the government to find alternate sources of revenue.
Customs officials on Wednesday, however, denied that a fall in customs revenues was responsible for the failure to meet the total revenue target.
Kim Ngoun, spokesman for the Customs Department, said customs revenues for the first quarter totaled $40 million at a 3,000-riel-per-dollar exchange rate, which he said was not lower than the department’s 25 percent target.
But Kim Ngoun acknowledged that smuggling, especially around the Thai border town of Poipet, was depriving the government of valuable customs duties.
A joint committee from the Ministries of Finance, Interior, Defense and the Customs Department traveled to Poipet and Pailin earlier this month to assess the customs and tax situations, he said.
He said for now the Pailin government will be allowed to keep their revenues to help rebuild the semi-autonomous area.