Logo of Phnom Penh Post newspaper Phnom Penh Post - PM announces major reforms

PM announces major reforms

Content image - Phnom Penh Post
Prime Minister Hun Sen was speaking at the 18th Government-Private Sector Forum last Friday. Facebook

PM announces major reforms

Prime Minister Hun Sen on Friday announced government plans for large-scale economic reforms, outlining a 17-point strategy to stimulate economic growth that he said could save the private sector up to $400 million a year.

The strategy included a number of key money-saving initiatives for private businesses, including reducing costs associated with shipping, port service fees and electricity, as well as a reform of railway operation management.

In addition, the announcement also outlined plans to reduce the number of national holidays, introduce fiscal incentives on tax and customs, and expedite the completion of amendments to the Law on Investment and the Law on Special Economic Zones.

Speaking at the 18th Government-Private Sector Forum last Friday, the prime minister said: “With these measures, we will reduce costs [for the private sector] by approximately $400 million.”

Hun Sen said the reforms will allow Cambodia to continue being competitive with its exports if the EU removes the Kingdom’s access to the Everything But Arms (EBA) scheme.

“If the EU requires us to pay duty [on exports], we will be able to pay it . . . but if we keep the [tariff] preferences, it’s also a good thing. But do not let them instruct us that ‘you have to do this, you have to do that’, and if we do not follow what they say, they will cut the EBA,” he stressed.

In February, the EU announced it had officially launched the process to withdraw the Kingdom’s access to the EBA scheme, citing “serious” human rights violations and a backsliding of democracy as the reasons.

A decision on whether access is taken away is due to come 12 months after the process officially began, according to the withdrawal procedure.

Earlier this month an EU delegation conducted an official two-day visit as part of the review and monitoring process.

EBA withdrawal is a major concern for businesses operating in Cambodia, particularly those in the textile sector, with the scheme reported to be worth $676 million annually to the Kingdom.

Among the reforms, Hun Sen also reiterated other recently enacted policies – including the removal of Camcontrol from land border check-points and Camsab from ports, as well as tax incentives for small and medium enterprises and the agriculture sector.

The prime minister said the measures will reduce logistical costs for the private sector by lifting service fees at terminals and state ports, facilitating savings worth $6.7 million a year.

With respect to customs tax reforms, the prime minister said that from April 1 onwards, all services provided by the General Department of Customs and Excises for businesses will require the issuance of computerised invoices, thereby ensuring service fees do not exceed the prices listed, as well as offering improved transparency.

Additionally, the Ministry of Economy and Finance stated it will cut scanning fees for container exports and imports by 50 per cent – from $20 to $10 for a 20-foot container and from $32 to $16 for a 40-foot container.

The prime minister also advised the Council for the Development of Cambodia to have completed amendments to the Law on Investment and the Law on Special Economic Zones by the first half of this year.

Electricity rates were also addressed, with Hun Sen stating that prices will be cut this year for several types of users. These included an electricity price cut of $0.02 per kilowatt-hour for industrial users and plans to further reduce prices for skill-based industries and high-capital industries.

National holidays were also on the agenda, as the prime minister announced seven national holidays would be scrapped starting next year. He explained that Cambodia has 28 to 30 national holidays a year, while Singapore has only 11, Laos 12, Vietnam 13 and Thailand 16.

The cut in holidays is a move designed to increase efficiency and raise Cambodia’s appeal as an investment destination for foreign companies, he said.

Lim Heng, the Cambodian Chamber of Commerce vice-president, said the private sector has long requested that the government enact these reforms to help lower production costs.

This large scale reform will help to make the private sector more robust, especially as it will increase revenues, he said.

“This response is a government surgery to help the private sector by reducing production costs,” he said.

Additional reporting from Hin Pisei

MOST VIEWED

  • PM to vet NY holiday dates

    The Ministry of Economy and Finance submitted a letter to Prime Minister Hun Sen asking him to formally set a five-day national holiday from August 17-21 to make up for the Khmer New Year holiday in April that was postponed. Finance minister Aun Pornmoniroth sent

  • Cambodia rejects UN rights claim

    Cambodia's Permanent Mission to the UN Office in Geneva on Friday hit back at David Kaye, the UN special rapporteur on the Promotion and Protection of the Right to Freedom of Opinion and Expression after he raised concerns over the repression of free speech and

  • Snaring may spawn diseases

    The World Wildlife Fund (WWF) has warned that snaring of animals has become a crisis that poses a serious risk to wildlife in Southeast Asia and could spawn the transmission of zoonotic diseases to humans. Its July 9 report entitled Silence of the Snares: Southeast Asia’

  • Ex-party leader, gov’t critic named as secretary of state

    A former political party leader known for being critical of the government has been appointed secretary of state at the Ministry of Rural Development, a royal decree dated July 9 said. Sourn Serey Ratha, the former president of the Khmer Power Party (KPP), told The Post

  • Residence cards set for over 80,000 immigrants

    The Ministry of Interior plans to grant residence cards to more than 80,000 immigrants to better keep track of them. The ministry announced the plan on July 10, following the results of an immigration census. “An inter-ministerial committee and many operational working groups have been set up

  • Kingdom produces PPE gear

    Medical supplies from Cambodia have been donated to member countries of the Asian Development Bank (ADB) to assist in the fight against Covid-19, said an ADB report published on July 9. The report stated that the supplies were donated as a response to global efforts to

  • Kingdom, US vow stronger ties

    At an academic forum on Saturday to celebrate 70 years of Cambodia-US diplomatic ties, Cambodian researchers and officials expressed hope of encouraging US investments and for that country to deepen and improve its bilateral relations. Held at the Royal Academy of Cambodia, it reviewed the past 70

  • Fifteen Cambodians from Saudi get Covid-19

    The Ministry of Health on Sunday confirmed 15 more imported cases of Covid. The 15 men ‒ all Cambodian aged 21 to 33 ‒ arrived from Saudi Arabia on Friday via a connecting flight in Malaysia. They were travelling with 79 other passengers, three of them women. The ministry said 80 of the

  • Ministry requests school opening

    The Ministry of Education, Youth and Sport on Thursday said it would request a decision from Prime Minister Hun Sen to allow a small number of schools to reopen next month. Ministry spokesman Ros Soveacha said if the request is granted, higher-standard schools will reopen

  • Kingdom eyes India FTA, China deal set for August

    Cambodia is studying the possibility of establishing a bilateral free trade agreement (FTA) with India to open a new market with the second-largest regional economy. This comes as an FTA with China is scheduled to be signed next month while similar negotiations with South Korea