Budget for 2016 grows to $4.3B

[geovalin]

Chan Muyhong

The Ministry of Economy and Finance will up its budgetary allocation for 2016 to $4.35 billion, up 11.1 per cent from 2015, so as to maintain the Kingdom’s run of above 7 per cent growth, according to the 2016 Strategic Plan on National Budget.

Minister Aun Porn Moniroth revealed the proposed budget yesterday at the MoEF’s Macroeconomic Framework and the Strategic Plan of National Budget for 2016, and said the plan looks to support the government’s development policies, while maintaining growth levels at the same time.

“Cambodia’s economy has come to a new context of development, meaning Cambodia is becoming a lower-middle-income country and is in the transition of social and economic structure changes,” he said.

Moniroth said that the country would need to diversify its economic base by strengthening and expanding core sectors, like small and medium enterprises.

The current expenditure, which is paid for with tax collections, will allocate $439.3 million for general administration, up 4.6 per cent; $669.7 million for security and defence, up 9.8 per cent; $1.15 billion for social -sector spending, an increase of 10.7 per cent; and $1.89 billion will go towards the economic sector.

Capital expenditure, which uses government investments and donor funds, will increase for the four spending sectors by 5 per cent, 2.7 per cent, 4.7 per cent and 4.7 per cent respectively.

Son Chhay, chief whip of Cambodia National Rescue Party, said the 11.1 per cent increase in the national budget was not surprising, but that the government could have done better to increase the budget had tax collection been more strictly implemented.

“Currently, total tax collection stands at only 13.5 per cent share of the GDP. The government could have increased tax collection to 20 per cent of the GDP, which means $200 million more into the government’s budget. Cambodia will no longer depend on foreign funding,” he said.

He said the government was losing millions from poor tax collection, while at the same time it needed to reduce excessive spending.

“The revenue collection has lost around 30 per cent, while the spending has lost another 40 per cent. So far, the handling of budget has been ineffective. At National Assembly, a printer cost $35,000; this is really a waste of spending and an [inflated price],” he said.

The General Department of Taxation collected more than $1.06 billion in tax revenue in 2014, up 17.7 per cent from 2013’s collection. Meanwhile, the General Department of Customs and Excise reported taxes on imports and exports yielded $1.34 billion last year, up from the more than $1 billion in 2013.

Moniroth said the government will continue the implementation of tax restriction policy and budget expenditure restriction to achieve surplus revenues, as well as target 0.5 per cent of GDP increase in tax collections.

Chan Sophal, director of the Centre for Policies Studies, said the proposed budget reflects the current needs of the economy and was “quite reasonable”.

“It is based soundly on a projected 7 per cent economic growth and development. However, priorities are always debatable and it is very challenging to satisfy both the growing appetites for reforms and immediate results.”

http://www.phnompenhpost.com/business/budget-2016-grows-43b