Gov’t Implements Measures to Enhance Sub-National Expenditure Efficiency by 2024

• Sommana Yan
• 10 May 2024
• Local News
• 1506 Views

In a bid to streamline fiscal management at the sub-national level, the Cambodian Ministry of Economy and Finance (MEF) issued a pivotal circular on May 7, 2024. The directive mandates prudent budgetary practices across all sub-national administrations, emphasising the need to curb unnecessary local development initiatives.

Under the circular’s provisions, capital-provincial administrations are instructed to halt the transfer of tax revenue distributions to municipal, district, and commune administrations, effectively suspending projects reliant on this fiscal source for the current year.

Furthermore, the MEF has temporarily suspended 2024 budget allocations for five capital-provincial administrations, including Phnom Penh, Sihanoukville, Kandal, Kampong Speu, and Banteay Meanchey. These administrations are directed to reassess their budgetary plans for the fiscal year and submit revised proposals by 17 May 2024.

Across other provincial administrations, adjustments to local development expenditure must be made in alignment with actual revenue capacities to ensure budgetary equilibrium. Similarly, municipal, district, and Khan administrations are urged to rationalise expenses on local projects according to revenue realities.

Commune and Sangkat administrations are advised to review and reduce administrative overheads, utilising surplus funds from the 2023 budget to support affected projects or action plans. Meanwhile, loans obtained through fiscal revenue distribution from capital and provincial administrations have been temporarily suspended.

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