Logo of Phnom Penh Post newspaper Phnom Penh Post - ELCs earn just $5M for gov’t

ELCs earn just $5M for gov’t

A woman collects cassava at an ELC in Kratie’s Snuol district in 2012. Last year the ministry of agriculture collected $5 million in tax revenue from land concessions.
A woman collects cassava at an ELC in Kratie’s Snuol district in 2012. Last year the ministry of agriculture collected $5 million in tax revenue from land concessions. Heng Chivoan

ELCs earn just $5M for gov’t

The bulk of Cambodia’s economic land concessions (ELCs) – at the centre of numerous land disputes and human rights concerns over the past two decades – generated just $5 million for state coffers last year, with critics attributing the meagre returns to a lack of collection capacity as well as simple corruption.

The figure was made public last week during a power transfer ceremony for outgoing Agriculture Minister Ouk Rabun, who said the 1.4 million hectares of concessions under his ministry’s control generated close to $5 million in 2015 from 173 concessionaires, according to state-run media outlet Agence Kampuchea Presse.

With close to 2 million hectares in land concessions, divided between the Agriculture Ministry and Environment Ministry, concessionaires are expected to begin paying annual land rental fees to the government six years after being awarded the concession, with these fees ranging from $5 to $10 per hectare based on the type of land being leased.

Opposition lawmaker Son Chhay said last year’s lethargic collections were unacceptable, attributing this to a lack of “serious intention” on the government’s part to develop the land for revenue generation.

“They are looking to pocket the money from these land concessions,” he said.

According to Chhay, having multiple government ministries in charge of concessions only resulted in confusion.

“So when it comes to collecting [fees], it is confusing, because we don’t know which ministry does it, even though [collection] was supposed to be under the Ministry of Finance,” he said.

While admitting the low revenue could to some degree be attributed to insufficiencies in the government’s collection capacity, fees of “around $5 to $6 per hectare” were “funny”, said San Chey, director of the Affiliated Network for Social Accountability.

“While the government is looking to attract investment, both local and foreign, the tax rate is too low,” Chey said. “The government should review this mechanism to increase taxes from the concession program.”

Given that the Cambodian taxpayer is not seeing the benefits that should materialise from the concessions policy, Chey said the government should make these agreements public so that people can see whether the right amount of tax is being collected.

Latt Ky, head of the land section at rights group Adhoc, echoed that thought, saying it was difficult to create a monitoring system for land concession revenues given that there was no transparency and that “all the contracts were not available for the public” to peruse.

Agriculture Ministry spokesman Eang Sophalleth declined to comment as he had not seen the report, and neither Sao Sopheap, spokesperson for the Ministry of Environment, nor Lor Raksmey, spokesman for the Ministry of Agriculture, Forestry and Fisheries could be reached for comment.

MOST VIEWED

  • Ministry issues warning over coronavirus outbreak

    The Ministry of Health on Wednesday asked the public to be on “high alert” as a new virus wreaks havoc across Asia. However, no cases have been reported in the Kingdom thus far. The 2019 Novel Coronavirus (2019-nCoV) has raised the alarm for its similarity to

  • Call for boycott of Angkor unacceptable

    Dear Editor, I wish to express my strong disagreement on the article published by Traveller for their website with the title Best places to go in 2020: 12 destinations you should avoid. Below is my opinion of the article. It is obviously free for the Traveller to

  • Probe underway after wreckage of drone with Chinese characters found

    Air Force Command spokesman Prak Sokha said on Sunday that investigations are underway regarding the wreckage of a drone that was recovered in Koh Kong province’s Koh Sdech commune in Kiri Sakor district. The wreckage has been taken to the capital for further examination,

  • Gov’t slams UN rapporteurs over Sokha trial statement

    The Ministry of Foreign Affairs and International Cooperation and the Permanent Mission of the Kingdom of Cambodia to the UN Office in Geneva deplored the statement of three UN special rapporteurs who claimed that Kem Sokha’s trial was “tainted” due to irregularities. The reaction

  • No power shortages next dry season, says energy minister

    Minister of Mines and Energy Suy Sem has assured the public that Cambodia will not suffer power shortages during the next dry season. Speaking on local TV on Tuesday, Sem projected a rise in power demand during 2020’s dry season – which starts in November and

  • Gov’t takes steps to lower logistics, transport costs

    With the threat of losing trade privileges in the EU drawing closer, the government is taking measures to reduce logistics and transportation costs to safeguard the Kingdom’s competitiveness. The EU is due to decide whether or not to withdraw the Kingdom’s trade privileges