Friday, August 18, 2006

First of many boring work posts

With the formalities out of the way, I can finally be boring and talk about work. A few weeks ago, there was a public launch of a report that we commissioned by the Economic Institute of Cambodia (EIC) on corruption in the private sector. As a result of their research and macro-modeling the EIC determined that the high levels of unofficial fees paid by the private sector have a serious impact on the effectiveness of tax collection. They found that the official tax rate on the private sector is much higher than the effective rate actually paid. 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. They estimated that the potential loss in government revenue could reach US$400 million.

The Finance Minister took great umbrage to this figure and very publicly boycotted the launch of the report. About two weeks later the Hun-Sensation also launched a very strong verbal attack on EIC. This week it was announced that one of the few TV outlets for independent news was cancelled. I would certainly count that as a success for an anti-corruption program...

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