Cambodia faces revenue losses even with higher rubber exports


Cambodia lost 4% year-on-year from dry rubber exports despite an increase in shipments. The Khmer nation reportedly increased 15% of exportation of dry rubber amounting to 217,500 tonnes, However, because the price of the commodity fell to US$1,319 per tonne and due to several production costs in the country, Cambodia earned a revenue drop of less than US$287 million in 2018.

Director general of the General Directorate of Rubber, Pol Sophia says that out of the 436,682 of rubber plantations in the country, 201,949 were harvested in 2018 and about 217,500 were exported mostly to China, Malaysia, Singapore and Vietnam.

On the other hand, to help this revenue loss, the Agriculture Minister Veng Sakhon proposed to reduce taxes on rubber exports to attract more investors. He said that the proposal includes a tax exemption on shipments valued at less than US$ 2,000 per tonne. It also aims to appease players in the rubber industry who demanded tax reduction to lessen production costs.

Vice-president of An Mady Group, a firm owning rubber plantations, Lim Heng, expressed a go ahead on the proposal.

“If approved, this proposal will help the rubber sector a lot by reducing production costs. Right now, we are working with very small profit margins,”

“Revising taxes on rubber exports will help companies in the sector survive,” he said.

The government now levies $50 in tax duty per tonne of rubber exported if it is priced between $1,000 and $2,000 per tonne. $100 is charged if the value exceeds $2,000 per tonne. Shipments of rubber valued at less than $1,000 per tonne are not taxed.

The said proposal will be submitted to Prime Minister Hun Sen in the near future.

In an another effort to reduce costs for businesses and make the country’s products more competitive, the government also announced the elimination of several district-level agencies especially the Kampuchea Shipping Agency and Brokers, also known as Kamsab. The abolition of Kamsab, an agency of the Ministry of Public Works and Transport, will cut down expenses and red tape traders.

Prime minister Hun Sen said, “Kamsab is responsible for a loss of around $500,000 per year for Cambodians. Removing it will make our economy more competitive and facilitate trade,”

“This type of reform will help our national economy grow more efficiently,” he added.

The Cambodian government vowed to adopt a new strategy to boost economic self-reliance by reducing costs for businesses and help different sectors including the rubber industry.