Without raising taxes or relying more heavily on foreign aid, the government will fund spending increases called for in next year’s budget with an anticipated rise in revenues from exports and investment, officials said.
Though the budget has yet to be adopted by lawmakers, the Council of Ministers on Friday announced it had approved spending of $2.4 billion for next year, an 18 percent increase over current levels, which were already an 11 percent increase over last year’s budget.
Details of the new budget plan have yet to be released, and the budget drafting process is frequently criticized for a lack of transparency. Spending approved last year for the current plan included a 24 percent increase for defense and security.
Council of Ministers spokesman Phay Siphan said yesterday the budget plan would be made public after it had been referred to the National Assembly.
The $300 million increase in spending will be derived from rising agricultural production and exports as well as more rigorous tax collection, he said.
“We have to preserve national finances,” said Mr Siphan. “We will not increase taxes but strictly collect them.”
Finance Minister Keat Chhon said on Friday that the government planned to increase tax collection to 13 percent of GDP. Economists estimate that tax collection currently stands at around 11 percent of GDP.
“When there is no tax barrier, there will be an increase in exports,” said Mr Siphan, adding that an increase in supply would bring prices down on the local market.
Yim Sovann, spokesman for the opposition Sam Rainsy Party, said he had yet to see a copy of the draft budget.
“I only get it one month prior to its adoption,” he said.
CPP lawmaker Cheam Yeap, chairman of the Assembly commission on banking and finance, said yesterday he expected the draft budget to be submitted to the body of lawmakers by today.
He said spending of aid donor funding would be limited to irrigation and infrastructure. The increase in spending was to come from an expected rise in investment.
“We are giving [investors] more time to pay taxes and giving them tax exemptions on production materials,” said Mr Yeap.