Petroleum smuggling through the former Khmer Rouge zones near the Thai border is costing the government $800,000 a month in lost revenue, Finance Minister Keat Chhon said Wednesday.
Several senior government officials agreed Wednesday that petroleum smuggling has become a serious problem and said that new offensives are in the works to crack down on smugglers and tighten the collection of much-needed revenue.
“We will take tougher measures to curb this and all kinds of smuggling,” Keat Chhon said following a finance workshop.
However, the finance minister and other officials did not specify what measures the government would take.
For months now, smugglers have been bringing about 10 truckloads of fuel a month into Cambodia through the former guerrilla zones of Pailin and Sampoeu Luon, according to Kim Nguon, deputy chief of ports. Despite previous vows to end the smuggling it appears to be continuing unabated.
“[Gas smuggling] is customs’ biggest problem and our biggest loss of revenue,” said Kim Nguon.
Another government source said last week that petrol and other goods also enter the border town of Poipet, Banteay Meanchey province, with only a fraction of the mandated duties reaching the national budget. Poipet borders the Thai town of Aranyaprathet and is an international checkpoint.
Customs officials said Pailin has attracted unscrupulous businessmen because of the tax-free status granted to the former Khmer Rouge stronghold in 1996.
Oil and other goods can be brought into the autonomous zone without having to pay customs duties—$280 for a ton of gas, $490 for motor oil—to the national government. The duty-free goods are intended for use within the zone, but gasoline and motor oil are then trucked out of Pailin to Battambang and other areas.
The convoys, customs officials complained, are often armed, while customs officials are not.
Customs revenues are a vital source of revenue for the government, accounting for more than half of all government revenues. Petroleum accounts for about 75 percent of customs duties.
Although petroleum smuggling is making a dent in revenues, there was also good news for the central government in October.
After months of sluggish revenues due largely to a drop in imports, customs collected 48 billion riel ($12 million) in duties last month, up 11 billion riel from September and just 2 billion riel shy of the target, Kim Nguon said.
Kim Nguon said the calmer political atmosphere had given businesses confidence to begin importing more goods and return to normal practices.
Whether this latest attack on smuggling will succeed remains to be seen. Previous public avowals by the government to stop gasoline smuggling have had little impact. A crackdown was announced in July by the two prime ministers, with demands for more border inspections. But according to customs, the same number of containers seem to be coming through as before July.
Then late last month Second Prime Minister Hun Sen issued a seven-point plan aimed at combating “smuggling in any form.”
After that order, several top officials visited border checkpoints, including a trip to the northwest by Defense co-Minister Tea Banh and a visit by co-Minister of the Council of Ministers Sok An to Takeo province, which borders Vietnam.
Kim Nguon said the inspections by Tea Banh in particular had an impact because the normal weekly total of about 1 billion riel doubled following his visit.
Tea Banh could not be reached for comment on Wednesday.
Council of Ministers spokesman Khieu Thavika said Wednesday that the Council of Ministers met last week to discuss tax collection, including customs and vehicle tax collection.
Another meeting has been scheduled to discuss specific measures that can be taken against smuggling and other “illnesses of society,” such as illegal logging, said government spokesman Sieng Lapresse.
Keat Chhon said every level of authority, including the military, has promised cooperation.
But Kim Nguon pointed out it is the armed forces that are doing the smuggling.
“The Khmer Rouge people,” he said. “they don’t like tax.”
