Cambodia's tax department is under-resourced and understaffed, thereby hindering its ability to generate revenue, according to an Asian Development Bank (ADB) analysis released earlier this month.

The analysis, which took into account survey results from 22 tax revenue bodies across Asia between 2012 and 2013, paints Cambodia’s General Department of Taxation (GDT) as one of the least effective revenue bodies in Asia.

“Revenue bodies require an adequate level of staffing of motivated, well-trained professionals with high integrity,” the report states.

“Some revenue bodies, such as in Cambodia, India, Indonesia, the Philippines, and Myanmar, seem to be under-resourced and understaffed in proportion to the size of their populations.”

According to the bank’s survey, the GDT, which falls under the control of the Ministry of Economy and Finance, does not have authority to design its own organisatonal structure, allocate budgeted administrative funds, set staffing levels, hire and dismiss staff or negotiate staff remuneration levels.

Taxation bodies in Thailand, Vietnam, Laos, the Philippines, Indonesia and Papua New Guinea were all listed as having greater independence from their ruling government department.

The GDT’s human resources management was named as one of the least dynamic in Asia, with no flexibility in staffing- or qualification-related decisions, no staff development skills initiatives, no performance management, no rewards system and no periodic staff surveys.

The report also states that bank laws, which protect client confidentiality, were hampering tax auditors’ ability to obtain tax information. It adds that with no mail, phone, internet or direct debit services – only in-person services – the GDT is also one of the least user-friendly tax administrators in Asia.

Satoru Araki, public management specialist at ADB’s Regional and Sustainable Development Department, said Cambodia’s tax administration had room for improvement.

“Understaffing can be an obstacle for providing an adequate level of tax administration. Not only the number of staff [but] the capacity of tax officials need to be developed through an adequate education and training regime,” he told the Post yesterday.

“Weak tax administration capacity is a key challenge facing not only Cambodia but developing Asia in general.”

The ADB specialist urged the GDT to take a “comprehensive” approach to the issues listed in the recent analysis and called for full-scale tax administration reforms in the department. “In other words, none of a single area mentioned above, such as institutional arrangements or the use of ICT, will be a stand-alone panacea.”

Last September, the GDT announced a series of reforms, which were aimed at tackling the department’s customer services and revenue-raising issues, but none mentioned understaffing as an issue.

Strengthening tax collection to increase revenue, tax education for small- and medium-sized enterprises, reviews of investor taxation laws and better legal means for pursuing tax dodgers were all named as areas for improvement by the GDT’s director general Kong Vibol at the time.

Earlier this month, the World Bank published its Cambodia Economic Update, which showed domestic revenue had increased from about 13.2 per cent of total GDP in 2011 to about 15.2 per cent by 2016. Officials from the taxation department declined to comment.