Wednesday August 2, 2006
PHNOM PENH, Cambodia (AP) -- Cambodian leader Hun Sen on Wednesday mocked an independent research group that recently published a survey exposing rampant corruption and poor tax collection by his government.
The Economic Institute of Cambodia said in a report last month that only about 25 percent of taxes owed by the private sector in 2005 were collected, and that bribery seemed to have had an impact on tax collection.
It estimated the potential government revenue loss last year due to corruption at US$400 million (euro313.5 million).
Prime Minister Hun Sen on Wednesday ridiculed the institute's report and researchers.
"What kind of economists are they?" Hun Sen asked angrily in a speech during a visit to the port city of Sihanoukville.
"I call you a bunch of worms, ignorant," he said to the laughter of government officials.
He said his government recognized there had been a shortfall in tax collection, but that the report's claim of "a loss of up to 75 percent is impossible."
If that had occurred, he said, his government could have collapsed long ago.
The institute's April survey of 1,200 enterprises in nine municipalities and provinces of Cambodia found that businesses had paid US$330 million (euro258.6 million) in bribes last year to countless government agencies in exchange for their services.
Bribes also seem to have had an impact on tax collection, it said, noting that revenues collected fell short of what should have been collected under the official tax rate.
"In spite of the significant progress in collecting domestic tax revenue made by the tax department, only about 25 percent of the potential tax was collected from the private sector in 2005," it said.
Last year, a study prepared for the U.S. Agency for International Development reached similar conclusions, saying that Cambodia loses an estimated US$300 million to US$500 million (euro235 million to euro392 million) annually to various forms of corruption.
The Cambodian government has been repeatedly slammed by donors and civil society groups for doing little to tackle corruption.
Hun Sen said his government is working hard to combat smuggling and tax evasion to increase state revenue.