ASEAN FTA costs Cambodia $150mn in tariff revenue in 2016

The ASEAN Free Trade Agreement (AFTA) cost Cambodia $150mn in lost tariff revenue last year, with the losses projected to increase further in the coming years as the Kingdom phases out tariffs on goods originating within the 10-member economic bloc, a custom official said yesterday. Speaking following the closed-door annual meeting of the General Department of Customs and Excise (GDCE), Kun Nhem, the GDCE’s general director, said Cambodia collected $1.74bn in customs and excise revenue in 2016, a 10% increase over the previous year, despite losing $150mn in potential revenue as a result of ASEAN-related tariff reductions. However, he attributed the net revenue gain to GDCE’s improved customs control systems and better enforcement, as well as a successful crackdown on smuggled goods. The customs tariff is Cambodia’s main trade policy instrument and a major source of government revenue, amounting to nearly 55% of national tax revenue and about 8% of GDP. (Source: Phnom Penh Post)