Tax Revenues Soar Nearly 40%, Exceed $700M

Tax revenues saw a nearly 40 percent hike to about $700 million in the first half of this year, up from about $510 million in the same period last year, according to a press release from the Ministry of Economy and Finance’s general department of taxation—an increase largely attributed to improved incentive schemes.

The department collected a total of $706.75 million in tax revenues for the first half of this year, according to the document, compared with $510.25 million in the same period last year.

Choeng Vann Thor, former chief of Chamkar Mon district taxation office in Phnom Penh and now an adviser to the Senate, said an increase in incentives for taxation officials collecting tariffs and the implementation of new tax collection policies had contributed to the rise in revenue.

“Bonus is a factor that has driven the increase because previously officials got very little, so cleanliness and adherence to work disciplines were very limited,” Mr. Vann Thor explained, referring to corruption and informal payments.

Mr. Vann Thor said that increased bonuses are in proportion to tax revenues collected, therefore improving morale by offering legitimate incentives.

“Another factor is because they have issued more new policies, principles and procedures like letting people pay tax electronically or through banks and online, which takes less time and is faster, which results in the higher revenue and less fraud cases,” he said.

Independent economist Srey Chanthy said that the increase in tax revenues was likely due to the improved tax collection systems, which reduce loopholes.

“The government has been able to collect more taxes, especially from property and investment in construction and so on. The leakage [tax evasion] is minimized,” he said, adding that the booming economy had seen great increases in tax revenues from garment firms and rice and cassava exporters.

Mr. Chanthy said the spike in tax revenues in the first half of the year was extraordinary, however, and that the next six months were unlikely to see such a steep rise.

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