The Ministry of Economy and Finance has issued a prakas that will exempt rice producers from a 1 per cent tax in a bid to stimulate rice production and exports.

The prakas, or edict – dated October 11 and signed by Minister of Economy and Finance Keat Chhon – rescinds the tax on rice production and milled rice sales for three years. The move comes as the Cambodian government attempts to close in on its goal of exporting 1 million tonnes of milled rice by 2015. Lim Bun Heng, president of Loran Import-Export Company, said he was not aware of the prakas, but added that the tax relief would help the country’s rice exports as soon as it was implemented.

Rice exporters have long insisted that Cambodia remove domestic rice production taxes, he said. Thailand and Vietnam do not have such taxes, and the removal of the tax would put Cambodia on a more equal playing field, he said.

“It would encourage exporters, including me, to be more motivated to export,” he said.

Sun Kunthor, general director of Rural Development Bank, said he was not sure of the significance of the prakas yet but he supported the ministry’s attempt to push milled rice production.  “The ministry had tried to facilitate milled rice production very much. They have pushed hard for tax exemption of export,” he said.

Officials at the Ministry of Economy and Finance could not be reached for comment yesterday.