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Income Tax Coming to Cambodia?

SINGAPORE-Investment opportunities, creating a functional legal system, and the Cambodian

political situation were the main topics of discussion at a two-day conference on

Cambodian reconstruction held in Singapore last month.

Deputy Prime Minister Kong Som Ol called on foreign private investors to help implement

the State of Cambodia's (SOC) goal of "full economic liberalization and full

privatization." In return for such investments, he said, SOC would offer capital

guarantees and lower taxation, and acknowledge the initial need for expatriate business

staff.

Building on the theme of incentives, Vice Minister of Foreign Affairs Cham Prasidh

told delegates about preliminary plans for a new economic zone at Sihanoukville (Kompong

Som), which would allow duty-free exports and imports within the port area.

"Beginning next year I think we have to start income tax because some people

are very rich now in Cambodia," said Cham Prasidh.

Despite the upbeat investment picture painted by the SOC ministerial delegation-the

only Cambodian faction to attend the conference-questions from the floor concentrated

on the Cambodian political situation.

In a strongly worded speech, Foreign Minister Hor Namhong attacked the "arrogant"

violations of the Paris peace accords by the Khmer Rouge. "We should not attach

undue importance to the Khmer Rouge," he added, advocating that for the time

being they should be left aside while the other three parties to the accords continue

to cooperate with U.N. peacekeepers.

Hor Namhong, however, cautioned delegates that Khmer Rouge demands that the SOC government

be dismantled might lead in the last resort to the Cambodian government undertaking

"a surgical operation...[against these] criminals of genocide."

Such military force requires "an adequate development policy based on the natural

resources of the country to prevent the return of the Khmer Rouge," Hor Namhong

added.

A question on the lucrative timber and gem trading around Pailin-an area controlled

by the Khmer Rouge-prompted an awkward silence and then the sullen recommendation

that "if you want to deal in Pailin you have to deal with the Khmer Rouge!"

"I'll deal with whichever faction doesn't charge me income tax!" quipped

one businessman.

- Bill Harris

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