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No special oil and gas tax law, says Hun Sen

No special oil and gas tax law, says Hun Sen

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090217_13.jpg

Prime minister tells business conference in Siem Reap that future oil and gas revenue will be taxed under already-drafted legislation, despite criticism

Commodity Prices

Prices shown are aggregates of Phnom Penh market rates

collated on Monday, Feb 16.

Prices are indexed using the January 1, 2009, base rate.

  • Rice 2,400 riels/kg -4.0 percent
  • Paddy 1,120 riels/kg +12 percent
  • Beef 23,600 riels/kg -1.67 percent
  • Pork 16,600 riels/kg +3.75 percent
  • Chicken 18,200 riels/kg +1.11 percent
  • Tomatoes 1,600 riels/kg -54.29 percent
  • Bananas 1,880 riels/hand +17.5 percent
  • Palm sugar 2,960 riels/kg -22.11 percent
  • Granulated salt 1,440 riels/kg +20 percent
  • Cambodian milk 2,520 riels/can +0.8 percent
  • Gasoline 3,150 riels/ltr +6.78 percent
  • Diesel 2,900 riels/ltr

    +1.75 percent

  • Water 550/cubic metre unchanged
  • Steel 2,645 riels/kg

    +11.32 percent

  • Gas 61,845/cubic metre +30.06 percent

Source: Ministry of Commerce

NO THAI WAR, SAYS PM
PRIME Minister Hun Sen assured more than 100 local and foreign business leaders Monday that there would be no confrontation with Thailand that could interfere with business in the Kingdom. Speaking at a business conference in Siem Reap, Hun Sen said that development on the border was the main priority. “Cambodia has not prepared to create a big war with neighbouring countries. What we need is investment, road infrastructure and development in border areas,” Hun Sen said. He added that offshore disputes with Thailand were also being dealt with in a bid to help promote commerce – Deputy Prime Minister Sok An is preparing to negotiate a revenue-sharing agreement with our neighbour, the prime minister said. Hun Sen proposed splitting the concessions by block or by percentage. Cambodia and Thailand have disputed the maritime border in the Gulf of Thailand, an area that has been found to contain large deposits of oil and gas.

Photo by: TRACEY SHELTON

Hun Sen, seen in this file photo, said Monday that oil, gas and mineral revenues will be taxed under existing law.

 TALKING

 BUSINESS

Monday's Business Roundtable saw business leaders and the government discuss key questions on the future of the Kingdom’s economic environment including dollarisation, future investment and oil and gas revenues.

SIEM REAP

OIL, natural gas and mining revenues will be taxed under existing laws, and funds reinvested in infrastructure, Prime Minister Hun Sen said Monday at an economic conference in Siem Reap.

The conference, titled "Business Roundtable with the Government of Cambodia", brings together top business and government leaders.

"In order to manage resources, we are drafting a tax revenue [law] by including oil, gas and mining," said Hun Sen at a conference organised by the Economist Group.

The prime minister spent much of the speech lashing out at critics who accuse the government of misappropriating resource proceeds and failing to publicise contracts.

"[Nongovernmental organisations] are crazy ... how could we have committed corruption if the oil resources are still in the seabed?" he said.

He urged the US embassy and Chevron to help Cambodia collect royalty fees.

Foreign oil companies are exploring for oil and natural gas in the Gulf of Thailand, and Chevron announced in 2004-05 that hydrocarbons had been discovered.

The sector had been expected to generate tens of billions of dollars for the country, but estimates have been revised downwards following lower-than-expected drill results and falling energy prices.

Lack of transparency

Chevron remains tightlipped about its plans and is reportedly negotiating with the government on taxation.

The World Bank says the government signed production-sharing agreements for all six of Cambodia's offshore blocks, but little information is available about the details of the deals.

"This is how we will manage the budget of Cambodia for double-digit growth, which is estimated to account for nine percent of GDP within the decade," Hun Sen said.

But opposition leader Sam Rainsy said that the country needs a petroleum law to regulate the sector.

How could we have committed corruption if ... oil resources are still in the seabed?

"When there is a new source of revenue that will change the taxation structure and budget; we need to draft a special law to regulate the sector and incorporate it into the state budget," he said.

The prime minister also used the conference to fight back against donors' demands for an anti-corruption law, saying that the legislation will be part of a package of laws.

"[The anti-corruption law] will be passed after the criminal code is passed. ... Japan and France are helping us draft the law," he said.

"I am able to tell you that the anti-corruption law is not a miracle medicine to fight corruption," he said.

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