Thailand
Cambodia’s revenues from customs, tax on new course
Revenues collected by the General Department of Customs and Excise (GDCE) and the General Department of Taxation (GDT) have started taking new twists and turns after the government has entered into multilateral and bilateral free trade and partnership agreements to provide economic benefits to the country, Prime Minister Hun Sen said.
Mr Hun Sen said the revenue collected by GDCE has been on the downtrend, while the revenue collected by GDT has been on the uptrend after Cambodia entered into Regional Comprehensive Economic Partnership Agreement (RCEP) and Free Trade Agreements with China and South Korea.
The National Assembly of the Republic of Korea on 27 September 2022 gave its formal consent to the Cambodia-Korea Free Trade Agreement (CKFTA) through its ratification to make Cambodia’s second bilateral trade agreement officially valid and effective for enforcement in most likely a 60-day period of time.
CKFTA is the second bilateral free trade agreement (FTA) for Cambodia following the Cambodia-China Free Trade Agreement (CCFTA) that was enforced on 1 January 2022. Cambodia already enjoys special trading benefits with South Korea and China under the Association of Southeast Asia Nations (ASEAN)-Korea Free Trade Agreement, ASEAN-China FTA, and the Regional Comprehensive Economic Partnership Agreement (RCEP) that was enforced on the same date.
RCEP comprises 15 countries, among which 10 are the member states of the Association of Southeast Asian Nations (ASEAN), while the rest are trade partners that include Australia, China, Japan, South Korea and New Zealand.
South Korea signed the free trade agreement with Cambodia in October last year after His Majesty King Norodom Sihamoni, King of the Kingdom of Cambodia signed into law the ratification of the Free Trade Agreement between Cambodia and South Korea on January 29, 2022, after it was cleared by the National Assembly and Senate.
GDCE performs duty collection of all import-export goods, while GDT collects internal tax revenue from businesses that have business operations and or transactions in Cambodia and individuals who consume products and or services supplied and available in the domestic markets.
Prime Minister Hun Sen said the internal tax revenue—calculated without the inclusion of customs duty and non-tax revenue—has reached nearly $3 billion or approximately 95 percent of the national budget in the first nine months of this year, which means Cambodia can currently generate at least $250 million per month.
“This is what we want. Normally, in a country that is being developed, the customs revenue falls, while the internal tax revenue increases. This is a principle … as we are in free trade zone frameworks … This means the mutual importing is done without paying taxes and so the customs tax need to gradually fall, but the internal revenue needs to be increased,” Prime Minister Hun Sen pointed out.
GDT collected $2,680 million in tax income in the first three quarters of this year, representing 95 percent of the national budget plan 2022.
The tax revenue figure was presented by Kong Vibol, GDT Director General, at the “American Chamber of Commerce Fiscal Update and Audit” meeting organised by the American Chamber of Commerce in Cambodia on 28 September 2022. The GDT had collected around $2,111 million as tax revenue in the first nine months of last year.
However, Vibol said the increase in tax revenue collection was due to the tax system reforms, including the provision of services to taxpayers and good registration services, good audits, debt management and resolving issues to make it easier for taxpayers to pay their taxes. According to the plan in the national budget law, the GDT is tasked to collect $2.8 billion in tax revenue in 2022.
Vibol further said that in 2022, the GDT will collect 10-15 percent more tax revenue than planned without any problem. The GDT encourages small businesses to register to pay their taxes properly and avoid tax evasion because when small companies do not pay taxes properly, large companies can get into trouble.
Source: https://www.khmertimeskh.com/501161821/cambodias-revenues-from-customs-tax-on-new-course/