The Kingdom’s agriculture sector insiders welcomed the government’s decision to suspend prepayment of tax on profits for companies dealing in agricultural products, saying the move will attract investors to the sector.
Cambodia Rice Federation vice-president Hun Lak said the decision made by the government is good for the sector, especially exporters.
“This is a good thing as it will help reduce production costs and make us more competitive,” he said. “It will encourage investors to pump more money into the country’s agriculture sector.”
Minister of Economy and Finance Aun Pornmoniroth issued the prakas last week to suspend prepayment of tax on profits for companies dealing with the production, supply or export of agricultural products such as paddy rice, milled rice, corn, beans, pepper, cashew nuts, cassava and rubber.
The exemption is valid for the next five years, starting this month, according to the prakas.
The sub-decree on tax incentives for small- and medium-sized enterprises in priority sectors, signed by Prime Minister Hun Sen on October 2, identified six priority sectors.
These include the agro-industry and food production and processing, which will receive an income tax exemption for three to five years from the date of tax registration for newly registered enterprises, or from the date of tax registration updates for enterprises already registered.
Cambodia Chamber of Commerce vice-president Lim Heng said according to the previous law, the government required all registered companies engaged in agriculture products to prepay one per cent of company’s turnover, but this is now suspended.
He said the decision is intended, in part, to entice investors.
“The suspension of prepayment of tax on profit will help to ease the burden of enterprises that do not earn profit as they don’t have to prepay one per cent as they did before,” he said.