As Cambodia continues to struggle with its cost competitiveness in the rice sector, rice millers and exporters met with the General Department of Taxation on Wednesday asking for an exemption from paying the 10 per cent value added tax (VAT), saying that it will help ease prices in the sector.
Kim Savuth, vice president of the Cambodia Rice Federation, said millers are having to pay higher taxes than neighbouring countries and not having to pay VAT will make them more competitive in at a time of heightened competition with regional integration looming at the end of the year.
“If we can get VAT exception, it would be good for rice miller to survive” he said, “We don’t want the rice miller to have to turn to corruption.”
Savuth said millers will dodge the tax if they are under pressure to continue paying VAT. He said Cambodia should follow Thailand’s example and apply the tax only to restaurants or companies that are processing the rice into other products.
Ngang Sophal, owner of Mom Sophal rice miller, said that paying VAT will increase his costs, making him less competitive than neighbouring countries. Sophal, who is currently registering to pay taxes, added that he was looking for more clarity on his future tax expenditures.
“I am concerned about how long I can survive in this business. I might sell my land instead of continuing,” he said.
The Tax Department could not be reached for comment.
Meanwhile, at a separate meeting on Wednesday, a Korean delegation met with the CRF and government officials to discuss investing in a grain port along the Mekong River to facilitate the transport of rice and agricultural products.
“It is not only a benefit for deducting the cost of rice delivery but also a benefit for other agricultural products and agriculture by products too,” said Moul Sarith, acting secretary-general of the Cambodia Rice Federation.