The government collected about $1.2 billion in taxes during the first nine months of the year, 20 percent more than the same period last year as the economy further shifted from the difficult-to-tax agriculture sector.
The Ministry of Economy and Finance’s general department of taxation plans to follow up the $200 million revenue increase with a further tightening of audits and collections, the department said on Thursday in a statement.
“Audits will be strengthened for the main sectors with potential, such as the tourism sector’s hotels and restaurants, and the import-export and construction sectors, as these sectors could provide high tax revenue,” the statement said.
Further attention would also be given to the collection of excise taxes on cigarettes and alcohol, and taxation officials will continue to conduct street surveys in Phnom Penh to find businesses that are not properly registered, the statement said.
Earlier this month, the Commerce Ministry said fewer than half of Cambodia’s 42,000 registered businesses had reregistered online as required.
Keat Heang, managing director of auditing firm Cam Accounting and Tax Services, said the growth in tax revenue was driven by the economy shifting from agriculture to taxable sectors such as construction, manufacturing and tourism.
“For example, my clients are mostly construction firms, and because their investments are big and returns are high, they pay a lot of taxes and can support the economy a lot,” he said.
A far more precise system of tax collection was also introduced this year, he said, transitioning taxation from an “estimate regime” to a “real regime,” although the process has yet to be completely digitized.
A World Bank report released this month estimated tax revenue would reach 18.8 percent of GDP this year, up from about 10 percent five years ago.
“Cambodia has achieved enormous success in terms of boosting revenue collection,” World Bank senior economist Sodeth Ly said.
(Additional reporting by Michael Dickison)