The Sihanoukville Autonomous Port (PAS) in October last year. pas
Prime Minister Hun Manet announced a programme from mid-April this year to reduce or eliminate Cambodia’s customs duties in accordance with the 2022 ASEAN Harmonised Tariff Nomenclature (AHTN), as part of the ASEAN-Japan Comprehensive Economic Partnership (AJCEP).
The initiative was enacted through sub-decree No 30, to apply exclusively to imported goods originating from member countries of the agreement, adhering to the provisions of Chapter 3 on the rules of origin.
The article states that importers must adhere to the rules and procedures established by the Ministry of Economy and Finance in implementing the agreement.
Sin Chanthy, president of the Cambodia Logistics Association (CLA), said on February 19 that the partnership would enhance ASEAN-Japan trade in response to global economic developments through trade liberalisation, services, relocation of individuals and investment.
“The agreement is beneficial, as reducing customs barriers will significantly aid producers and exporters. However, we need to focus on increasing exports rather than imports to fully leverage the agreement. It will also bring considerable benefits to the wider Cambodian society by promoting national economic growth,” he stated.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia, noted that the Kingdom has considerable potential in the agricultural sector, abundant and affordable labour and a favourable geographical location at the heart of ASEAN, along with an efficient transportation system.
He added that reducing tariffs or removing barriers for partners in the agreement, particularly Japan, is unlikely to result in significant losses and will enhance logistics capacity.
“I don’t think there’s much to lose, as most goods brought by Japan to Cambodia are stockpiled for processing. In return, Cambodia exports processed goods to Japan, like agricultural products and bicycles. Therefore, the removal or reduction of customs barriers under the AJCEP would be profitable,” he said.
Kun Nhem, director-general of the General Department of Customs and Excise (GDCE), reported an annual revenue of 9.267 trillion riel (approximately $2.288 billion) in 2023, a decrease of 15.7% compared to 2022, during the group’s annual meeting.
“[The department] achieved 82.4% of the plan set by the 2023 Law on Financial Management” he stated.
“Revenue collection did not go according to plan, owing to a number of significant challenges. Particularly, the decline in the automotive market, which has been a major source of revenue for the department, the continued expansion and deepening of the implementation of free trade agreements [FTAs], the growth of domestic production in place of imports and the persistence of more complex tax evasion activities which constantly take new forms,” he explained.
According to the GDCE, the trade volume of imports amounted to $24.18 billion in 2023, marking a decrease of about 5% compared to 2022.
The main imports included telecommunications products, raw materials and machinery for investment projects, construction materials, vehicles, groceries and other commodities.
Export volume was valued at $22.86 billion, an increase of 1.8% compared to the year prior.
Garment investment saw a decrease of 13.1%, whereas non-garment investments (such as electronic components, electric wiring, wood products, bicycles, bulbs, processed animal skins, tyres, plastics, auto parts and other industrial products) grew by 20%. Agricultural products increased by 24.3%, as per the GDCE.
