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Government Extends Rice Sector Income Tax Exemption for Another 5 Years

PHNOM PENH: The Minister of Commerce, Pan Sorasak, has said the government will continue to exempt income tax for rice exporters and rice mill owners for five more years. He made this statement during the Annual General Meeting and Election for the 4th Mandate on Wednesday morning, 23 November.

Ministry of Commerce Spokesperson, Penn Sovicheat, has confirmed to EAC News that the government's policy to help the rice sector through tax incentives continues. However, he reminded that companies that have expired tax exemption documents must reapply.

Minister Pan Sorasak affirmed that the Ministry of Commerce will strive to help the rice sector in Cambodia become more competitive, highlighting how the Royal Government has also been encouraging more investment and expansion to international markets in this sector.

He stressed that the Ministry of Commerce not only considers rice exporters but also strives to help small-scale farmers especially by promoting agricultural contracts between farmers and small-scale rice mills with work carried out through the Accelerating Inclusive Markets for Smallholders (AIMS) project, funded by the Royal Government and IFAD.

The Ministry of Economy and Finance on 11 October 2011, announced a minimum tax exemption of 1% on the annual turnover. Additionally, maximum income tax exemption includes a key period, plus a priority period of three years.

Since 2015, after the introduction of the first phase of the 2010-2015 rice policy, investors, exporters and rice mill owners of Cambodia have been exempt from annual income tax. Taxes on by-products from locally sold rice are exempt, withholding tax is suspended and waived, rice export fees are exempt, and payment for the Ministry of Environment's Environmental Impact Assessment is also waived.

There are also special preferential rates for rice exports on consumer services in Sihanoukville and Phnom Penh ports, and special rates on rice loans from the Rural Development and Agriculture Bank, which encourage other private banks to lower interest rates from over 12% to below 8% per annum.

In the first 10 months of 2022, Cambodia exported nearly 510,000 tons of rice to foreign markets, an increase of 10.67% compared to the first 10 months of 2021. At the same time, Cambodia also exported more than 2 million tons of rice to Vietnam, a decrease of 8.27% compared to the same period in 2021.

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