Cambodia - Politics, government, and taxation

Prior to 1991, Cambodia had long been dominated by authoritarian regimes. Since 1993, however, Cambodia has had a multi-party democracy. During its first phase of democracy, Cambodia actually had 2 prime ministers, 1 from each of the 2 major political parties, as a kind of political compromise. In 1993, Cambodia became a constitutional democracy with the popular Norodom Sihanouk serving as the king. Sihanouk has been an important force in contributing to compromise among competing political factions. The system of having 2 prime ministers, however, became unworkable and was highly inefficient. It also created a particularly complex environment for international investors or others pursuing economic or development activities in Cambodia. New national elections in 26 July 1998, resulted in a new government with only 1 prime minister.

Cambodia has a bicameral legislature, consisting of a popularly elected National Assembly (122 seats) and a Senate (61 seats). The members of both bodies serve 5-year terms. The king chooses the prime minister after a vote of confidence by the National Assembly. Since 1998, the prime minister has been Hun Sen. There is also a judicial branch led by the Supreme Court.

Taxation and the ability to collect revenues by the government remain weak, though government revenues increased 40 percent between 1998 and 1999. Such revenues represented only 11 percent of the GDP and direct taxes accounted for only 6 percent of total domestic revenue. Corruption and an inability to collect taxes plagued the government throughout the 1990s.