Tax revenue exceeds expectations following reforms
THE General Department of Taxation (GDT) collected $1.93 billion in tax revenue last year, a 30 percent increase over 2016 and well above the government’s own proj e c t i ons, according to the department’s director, Kong Vibol.
Following the GDT’s annual meeting in Phnom Penh yesterday, Vibol told reporters that the government expected to collect $1.71 billion, but reforms to the tax collection agency had resulted in the higher haul.
“It is a good result for the GDT and for the government, which reflects the efficiency of the reformat of the tax system,” he said, referring to the GDT’s tax overhaul in 2015.
According to Vibol, incometax revenue and VAT collections increased by 31 percent, while real estate tax and salary tax increased by 12 percent and 10 percent, respectively.
Anthony Galliano, CEO of Cambodian Investment Management, said yesterday that the increase in revenue could lead to a decrease in the Kingdom’s reliance on foreign donors.
“If this performance continues, I expect the Kingdom can substantially fund its annual budget within 3 years with the combination of GDT and customs revenues,” he said.
Galliano added that some taxpayers remained concerned regarding the “assertiveness of audits”, and said it would be helpful if the GDT would continue to improve its application of tax laws and registration processes.
Clint O’Connell, head of Cambodia Tax Practice for foreign investment advisory and tax firm DFDL Cambodia, called the revenue number “truly remarkable” and credited GDT officials for their reforms to the department.
He also cautioned against predicting self-sufficiency in the annual budget, noting spending increases could accompany gains in tax revenue.
“There are a number of vari- ables that need to be taken into account, such as the growing expectations of Cambodian citizens to see some return on the State revenue that is being collected,” O’Connell said.
Customs tax collection also increased last year, up 10.4 percent to $1.9 billion, according to a document dated Januar y 23 from the General Department of Customs and Taxation.