The erstwhile dispensation led by then Prime Minister Hun Sen launched a two-phase (2014–2018 and 2019–2023) Revenue Collection Strategy that helped form a solid base for Cambodia’s sustainable economic growth and optimizing revenue collection. These initiatives provided the government with adequate resources to allocate toward priority goals, ensuring both budget reliability and effectiveness. The latest strategy, an initiative purely crafted under the guidance of Prime Minister Hun Manet, takes it a step forward to not just strengthen the financial foundation but support Royal Government’s socio-economic policy agenda. The strategy, if the desired objectives are achieved, will make realise Cambodia’s vision of becoming a high-income country by 2050.

The Royal Government this month introduced the Revenue Collection Strategy for the 7th Legislature of the National Assembly to strengthen the financial foundation and support its socio-economic policy agenda.

The strategy outlines a clear vision, objectives, goals, and approaches, along with key measures to modernize both tax and non-tax administration and revise tax policies. It also defines key performance indicators and actions for monitoring and evaluation, ensuring the strategy’s effective and efficient implementation.

In the new mandate of the 7th term of the National Assembly, under the leadership of Prime Minister Hun Manet, the Royal Government launched the Pentagonal Strategy-Phase 1, which aims to ensure growth, equity, efficiency, and sustainability, maintaining the momentum of peace and promoting national development in the medium and long term through radical reforms across all sectors.

With the development of socio-economic conditions and preparations for graduation from Least Developed Country (LDC) status, national budget revenues will play an increasingly important role as a source of financing to ensure the achievement of this ambitious vision. In this context, implementing the revenue mobilization strategies under the Public Financial Management Reform Program remains a core task among the government’s major reform programs.

This is essential for ensuring sustainable economic growth, maintaining the momentum of revenue collection, ensuring justice and equity for taxpayers, and providing the foundation for continued effectiveness in revenue management to meet the government’s spending needs in implementing the Pentagonal Strategy-Phase 1.

Since the government launched and implemented two revenue mobilization strategies in 2014, current revenue collection, including tax revenues (income taxes and customs duties) and non-tax revenues, has increased and proven to be remarkably durable. This success comes despite Cambodia being affected by global economic uncertainties in recent years, such as the lasting effects of the Covid-19 crisis, the outbreak of the Russia-Ukraine war, conflicts in the Middle East, and dramatic changes in global monetary and public financial policies in major countries.

Although Cambodia’s tax reform has made significant progress, it is still not sufficiently resilient to changes in the global environment, which remains highly uncertain. Additionally, it has not yet fully adapted to changes in the socio-economic structure.

Cambodia continues to place a stronger emphasis on indirect taxes rather than direct taxes and has not yet fully mobilized revenue from existing taxes. Efforts to broaden the tax base have also not reached their full potential.

To meet the growing needs, the Royal Government has decided to launch a Revenue Collection Strategy with a clear vision, purpose, and goals, along with a defined approach. This includes the introduction of key measures for modernizing fiscal and non-fiscal revenue administration, as well as tax policy analysis.

The strategy also identifies performance indicators and key actions for monitoring and evaluation, ensuring the efficiency and effectiveness of its implementation.

Strategy to ensure economic growth

Prime Minister Hun Manet stated in the report that with peace, political stability, and macroeconomic stability, Cambodia has, over the past two decades, become one of the fastest-growing economies, achieving an average annual growth rate of over 7 percent before the Covid-19 outbreak.

This success was driven by the implementation of strategic planning policies and various reform programs, carried out with a proactive and highly responsible approach to promoting competitiveness and economic diversification.

Notably, the Royal Government has launched a two-phase Revenue Collection Strategy as part of the Public Financial Management Reform Program. The first phase covered 2014–2018, and the second phase spanned 2019–2023.

“These strategies contributed significantly to building the foundation for sustainable economic growth and optimizing revenue collection,” Manet said.

The achievements and progress of these reforms include improved governance, institutional reforms, capacity building for officials, promotion of a tax payment culture, public education on laws and regulations, and enhanced inter-ministerial and institutional coordination in revenue collection management, he added.

The Premier said the two phases of the Revenue Mobilization Strategy also played an active role in the successful implementation of the Rectangular Strategy Phase III and IV, as well as other policy programs. These initiatives provided the government with adequate resources to allocate effectively toward priority goals, ensuring both budget reliability and effectiveness.

In addition, the Royal Government continues to strengthen the governance of public institutions, maintain high economic growth, create decent jobs for the people, and expand and improve the quality of public services such as education, healthcare, and other essential basic services. These efforts aim to ensure security and welfare for all citizens, regardless of their circumstances.

“The Revenue Collection Strategy of the Royal Government for the 1st term of the 7th Legislature of the National Assembly represents the next phase of public finance reform.

“Its goals are to ensure sustainable economic growth, promote fairness and equity in tax payments, and sustain revenue growth while improving the effectiveness of revenue collection management.

“The strategy is designed to meet the financial requirements for implementing the Pentagonal Strategy – Phase 1,” Manet said

Explaining that the strategy is based on several key principles, Prime Minister Hun Manet said it (a) guarantees economic growth, creating a favourable environment for economic activities, promote commercial ventures, and sustain economic growth

(b) avoid creating new taxes, refraining from introducing new tax types or increasing tax rates, except for special taxes on goods and services that impact public health, society, and the environment, continue implementing targeted and thoughtful incentive policies while ensuring tax collection mechanisms do not overlap c) enhance taxpayer engagement, strengthening mechanisms for responding to taxpayers through technology adoption and by reinforcing the code of conduct for revenue collection officials, (d) implement strategic measures, developing focused, strategic, and minimal measures that generate revenue without causing economic distortion, while ensuring equity and fairness in tax payments, and
(e) foster private sector participation, promoting collaboration with the private sector to ensure a holistic approach to measures and pragmatism. This aligns with the vision of transforming the state revenue system into a more modern, efficient, and adaptable structure capable of meeting the needs of national socio-economic development.

Based on these principles, the Revenue Collection Strategy of the Royal Government for the 7th term of the National Assembly will play a vital role in Cambodia’s socio-economic policy agenda. It embraces the use of advanced technologies, particularly information technology, to foster a cleaner, more intelligent, and efficient digital fiscal administration environment.

Besides, the strategy prioritizes the ongoing review of fiscal and non-fiscal policies to achieve Cambodia’s vision of becoming a high-income country by 2050.

This strategy aims to strengthen revenue collection, maintain economic momentum, and ensure accuracy, transparency, and fairness for taxpayers. It focuses on potential revenue sources while minimizing negative economic impacts.

“To achieve these objectives, the strategy has established the following goals—maximize revenue potential: collect revenue to its full potential and improve the efficiency of the entire state revenue collection system and this includes maintaining and promoting current account collection to reach 16 percent of GDP when economic growth returns to its potential, ensure system clarity:

enhance the clarity, accuracy, and predictability of the tax system to foster trust and stability and expand non-tax revenue Scope: Continue to broaden and strengthen the quality of the non-tax revenue system,” Manet said.

Revenue collection targets

Anthony Galliano, CEO of Cambodian Investment Management Group and the Vice President of the American Chamber of Commerce in Cambodia (AmCham), told Khmer Times that the government target of a state revenue collection rate of 16 percent of GDP or initially at approximately USD amounting $7.2 billion in 2025 is achievable based on current comparable numbers from the Cambodia Revenue Status of Budget in Brief 2024.

The Kingdom’s GDP is forecasted to grow approximately 6 percent in 2025, and resume the steady pattern of 5-7 percent, save periods of global recessions or economic shocks, he said. He added, on this basis the state revenue collection will need to increase USD 500 million in the short-term. That will is ambitious and a stretch goal in the latter part of the decade.

“The main challenges in achieving the goal are a narrow tax base which relies on a few sectors, such as tourism, agriculture, and garment manufacturing, significant portion of Cambodia’s economy remains informal making it difficult to track and collect taxes from businesses and individuals operating outside the formal system, low compliance rate, rising public spending, smuggling, and Cambodia’s reliance on international trade which means global trade disruptions can directly affect customs revenue,” he said.

When asked how effective the proposed modernization measures in addressing inefficiencies in the current tax and non-tax revenue systems are, Anthony said on a high level, the measures are leveraging advanced information technology to create a more streamlined and efficient tax administration process, enhancing the efficiency of the state revenue collection system, increasing the scope and quality of non-tax revenue collection, ensuring predictability and transparency in tax regime.

“The strategy includes well-defined key performance indicators and a robust monitoring framework with monthly revenue targets.

“I believe the goal can be more obtainable with increases in certain taxes which are nominal and execution of new taxes that remain stalled. Presently the Kingdom’s property taxes are among the lowest in the region and can certainly be increased.

“Capital gains tax enforcement for individuals and non-registered businesses has been delayed and would be a windfall if enforced. The informal economy is still close to 50 percent, an excellent opportunity to increase the tax base by registering non-compliant businesses, Anthony said.

He said there has been a vast improvement in the tax system in the last year, especially in audits, which are now handled much fairer and expeditiously. With the proposals tabled it should improve trust in the tax system through transparency, efficiency and monitoring measures, and education. Undoubtedly uncertainty in the tax and customs regime has dissuaded investors, thus this is a positive step.

Seun Sam, a policy analyst at the Royal Academy of Cambodia, told Khmer Times that the Cambodian government can fully collect the required tax revenue, as Cambodia has significant potential to fund the annual budget through taxes, customs duties, and non-tax revenues.

However, more importantly, the efficiency of budget management and revenue collection is key, he added.

“After the budget is collected, it is essential to ensure that 100 percent of it is effectively incorporated into the national budget.

“The efficiency of budget management and revenue collection is crucial because it helps increase public trust and saves national funds when managed effectively and correctly,” Sam said.

“In Cambodia, we have a lot of potential,” he said, adding, “We are strengthening all sectors to enhance revenue collection.”

“For example, in the tourism sector, we have many temples and potential tourist destinations. It is important to organize and promote domestic tourism widely, encouraging more local and international tourists to visit. This will allow the government to benefit from the growth of the sector,” he explained.

Up national budget

In 2025, the Royal Government aims to raise national budget revenue to 13.89 percent of the Gross Domestic Product (GDP), amounting to 29,046 billion Riels (approximately $7.2 billion), according to a circular on the implementation of the Law on Finance for Management 2025, issued by the Ministry of Economy and Finance (MEF) recently.

To achieve the above goals, the General Department of Taxation (GDT) and the General Department of Customs and Excise of Cambodia (GDCE) will organize, implement, and regularly monitor the quarterly tax revenue collection program, which is further detailed by month, according to the circular.

On a monthly basis, the GDT is responsible for collecting tax revenue, a key component of the national budget, averaging 1,171,141 million riels (about $292 million) per month.

Similarly, the GDCE is tasked with collecting tax and excise revenue, also part of the national budget, averaging 845,473 million riels ($211 million) per month.

Separately, national non-tax revenue is collected at an average of 305,836 million riels (about $76 million) per month. Additionally, the revenue collection program must include a detailed implementation plan, specifying the type and content of each revenue stream.

Deputy Prime Minister and Minister of Economy and Finance Aun Pornmoniroth recently stated that the 2025 budget has been designed to support the sustainability of state institutions, particularly the implementation of key policy priorities and specific reform measures for 2025.

These measures aim to address Cambodia’s new challenges, both within the domestic framework and in the regional and global context, he added.

The goal is to achieve the five strategic objectives outlined in the Pentagonal Strategy-Phase I, which will lay the foundation for realizing Cambodia’s vision for 2050, Pornmonirath said.

“This vision is part of the socio-economic policy agenda of the political program of the Royal Government during the 7th legislature of the National Assembly, where the well-being of the people remains the top priority, alongside critical infrastructure such as roads, water, electricity, and technology,” he said.

At the same time, the 2025 budget is designed to support the implementation of six priority policy programs and five key measures outlined by the Prime Minister during the first plenary session of the Cabinet of the 7th legislature of the National Assembly.

“In other words, it is focused on stabilizing the living standards of the people and promoting growth in certain target areas that are still struggling or recovering slowly,” he said.

Source: Khmer Times

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The Overseas Cambodian Investment Corporation (OCIC) has unveiled a $100 million plan to construct a 10-kilometer canal linking the newly inaugurated Techo International Airport (TIA) with the Bassac River and Funan River, marking a significant step in Cambodia’s transport and logistics development. Announced by Oknha Pung Khev Se, OCIC’s chairman, during TIA’s official opening on October 20, the canal will run from Boeung Cheung Lung to the Bassac River, extending toward the Funan River and ultimately the Kep Strait. The initiative aims to establish an integrated air, land, and water transport hub, reducing logistics costs, improving trade efficiency, and positioning Cambodia as a competitive player in regional commerce. The project forms part of OCIC’s long-term vision to develop a multi-modal transportation ecosystem that supports national economic growth and investment attraction.

In parallel, OCIC is advancing the TIA City development, a large-scale airport city combining residential, commercial, and transit-oriented infrastructure. Currently in its first construction phase, TIA City reflects Cambodia’s push for sustainable urbanization and smart city planning. OCIC, renowned for major projects including Koh Pich, Norea City, Chroy Changvar, and Olympia City, continues to play a central role in shaping Phnom Penh’s modern landscape. The canal, alongside the Funan Techo Canal project, is projected to strengthen agricultural and industrial logistics by linking provinces along the Tonle Sap and Mekong Rivers with export routes, fostering job creation, enhancing rural economic activity, and reinforcing Cambodia’s emergence as a logistics and trade hub in the Mekong region.

1. Boosting Trade and Export Efficiency

By creating a direct waterway connection between TIA and the Bassac-Funan river system, the canal will give Cambodia a cost-effective transport alternative to road and air freight. This means goods can move from Phnom Penh’s logistics hub to Kep Strait and the open sea much faster, reducing transport time and costs for exporters. Agricultural producers, industrial manufacturers, and small exporters will benefit from lower shipping costs and better access to international markets, making Cambodian products more competitive regionally.

Read more: 5 Reasons Why Chrey Thom Will Become Cambodia’s Next Economic Hub

2. Strengthening Local Businesses and Supply Chains

The canal will attract logistics companies, warehouses, and small-scale suppliers to set up operations around TIA and the new TIA City. This ecosystem will generate new opportunities for local entrepreneurs, from construction and transport firms to hospitality, retail, and real estate. Farmers and rural producers from provinces bordering the Tonle Sap and Mekong rivers can ship their goods more directly, linking them to domestic and export markets efficiently.

3. Stimulating Job Creation and Skills Development

OCIC’s project will generate thousands of construction jobs during the development phase and long-term employment in logistics, maintenance, and commercial services once completed. The establishment of TIA City near the canal will further support new urban communities, leading to demand for skilled workers in retail, technology, hospitality, and business services. This will not only reduce unemployment but also help upskill Cambodia’s workforce.

Read more: Can Cambodia Become Southeast Asia’s Next Startup Powerhouse?

4. Encouraging Foreign Direct Investment (FDI)

A modern, multimodal transport hub combining air, land, and water connectivity is a magnet for foreign investors. The canal will improve Cambodia’s reputation as a strategic logistics and manufacturing base for investors seeking alternatives to Vietnam or Thailand. This can lead to industrial park expansions, joint ventures, and public-private partnerships, further driving economic growth.

5. Supporting Tourism and Regional Connectivity

The project could also have a secondary benefit for tourism. With TIA serving as a new international gateway, the canal’s connection to the Bassac River can open opportunities for river tourism, sightseeing cruises, and leisure developments. Enhanced infrastructure and accessibility will strengthen Cambodia’s position as a regional tourism and business hub in the Mekong region.

Read more: 3 Best Businesses to Make Passive Income in Cambodia

6. Long-Term National Economic Impact

Ultimately, the canal project aligns with Cambodia’s long-term goals under its “Vision 2050” strategy to modernize logistics, diversify exports, and expand trade corridors. The integrated network around TIA will help reduce dependency on congested road systems and neighboring ports, keeping more economic value inside Cambodia. This means stronger GDP growth, export diversification, and improved resilience of local industries.

Conclusion

The $100 million canal project is not just an engineering endeavor, it’s an economic catalyst. By linking Techo International Airport to vital waterways, OCIC is laying the groundwork for sustainable growth, regional competitiveness, and inclusive prosperity. This visionary project has the potential to transform Cambodia’s logistics landscape, empower small businesses, and elevate the nation’s status as a modern, connected economy in Southeast Asia.

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