The Ministry of Industry and Handicraft released an early draft of the SME Promotion Policy yesterday that is aimed at providing a national-level framework to promote and regulate SMEs as well as spell out a clear tax regime for the sector, with the ministry working to complete it before the ASEAN Economic Community integration later this year.
The policy aims to provide a clear roadmap for SME development in the Kingdom by creating a national definition of SMEs, simplifying tax rules in order to get businesses to adopt better bookkeeping techniques, and tax compliance as well as improving technology adoption capabilities.
Speaking at a policy consultation meeting in Phnom Penh yesterday, industry and handicraft minister Cham Prasidh said SMEs play a significant role in the country’s economy and a comprehensive policy was needed to combat rising competition.
“This year, we are going into the integration of ASEAN Economic Community, which means we are going into regional and global competition. SMEs are contributing a lot to the country economy and employment, therefore, we need promotion policy to support them for a strong foundation to enter competition,” he said.
Sok Piseth, president of the Young Entrepreneur Association of Cambodia, said the policy needed more concrete substance, especially when it came to the definition of an SME, as the 2005 definition being outdated.
“This document can be used as reference to the forming of the policy, [but] overall, this document cannot be called policy yet. Most of the things that are covered in here are issues that the government has been working on, and which have been complied for the forum to discuss about,” he said.
“I expect to see more of an infrastructure to develop SMEs from this policy, where the definition of SME has to be defined. Without a consensus definition for SME, it will be hard to form a concrete policy,” he added.
Prasidh said a committee will be formed to work on forming a consensus definition for SMEs and will also align with ASEAN’s definition.
Te Taing Por, president of the Federation of Associations for Small and Medium Enterprises of Cambodia, said he welcomed the government’s initiative, but questioned whether the policy can be effectively implemented.
“SMEs in Cambodia have been surviving on their own. It is a good step that the government is forming policies to support SMEs now, but it is also about implementation of the policies,” he said.
According to Poeu Voleaks, director general of the Department of SME and Handicraft, the policy is aligned with other national policies, such as the Rectangle Strategic Plan III, National Strategic Development Plan III and the recently adopted Industrial Development Policy 2015-2025.
The current draft policy is only an “alpha version” and it will take more time to elaborate on the details, Voleaks said.
“I cannot tell for now when the policy will be completed for adaptation. We are still in the very early stages of drafting. It is about how fast the input collection process will go,” she said.
Voleaks said that funding from the Japan International Cooperation Agency (JICA) had ended, but the process would still continue.
“The ministry will still continue to complete the drafting of the policy even without JICA funding. We will work with the already existed inter-ministerial committee to complete it,” she added.