The Determinants of Tax Revenue in Cambodia: An ARDL Approach to Cointegration

The objective of this research is to analyze the impact of consumer price index, exchange rate, broad money supply, and export on tax revenue in Cambodia. The short-run effects from the ARDL cointegration model suggest that inflation negatively influences tax revenue. Changes in the exchange rate also had a negative effect on tax revenue, although the power of this influence was large. On the other hand, an increase in money supply was realized to improve tax revenue performance as revealed by a positive and statistically significant coefficient of broad money. The empirical results also indicate that the impact of exports on tax revenue was insignificant. The error correction term indicates that the flow adjustment was fast, in that about 83.76% of short-run deviations were corrected in one period, thus enabling the quick restoration to the long-run equilibrium after transient disturbances. In the long-run, only exchange rate and broad money were found to be statistically significant determinants of tax revenue. The relationship was found to be negative for exchange, but positive for broad money.