Ministry to lose $60M a year in revenue
Ministry to lose $60M a year in revenue
The Ministry of Commerce will lose $60 million in revenue annually after the government eliminated export procedures in a campaign to boost competitiveness, a senior official at the ministry has said.
Speaking at a press conference on Friday regarding the EU’s decision to impose safeguard measures on Cambodian rice, the ministry’s secretary of state Sok Sopheak said a series of government decisions to eliminate export procedures would help lower costs for businesses and rice exporters.
Sopheak said the November 2017 decision to eliminate export management fees from last year resulted in an annual revenue loss of $20 million.
He said last month’s decision not to require exporters to apply for a certificate of origin (CO) would yield in a $10 million revenue loss while the most recent decision to relieve Camcontrol from its inspection duties at border checkpoints will cause a further $30 million loss.
“[The revenue lost] from the reformation will help all types of businesses to conduct commerce as well as help the Cambodian rice industry,” he said.
Though the EU recently decided to impose customs tariffs for Cambodian rice exports, Sopheak said the government will lower operating costs to offset the burden incurred by the tariffs.
“[Very soon,] the Cambodian government may release a new sub-decree and some ministries will release some Prakas that are currently in preparation [to help the sector].”
The resulting losses would be equal to 73 per cent of the ministry’s revenue last year which saw it collect $82 million from public services.
Ministry report
The ministry’s 2018 report said Camcontrol generated $28.75 million from petroleum services and quality inspection of goods while revenue collection from public services amounted to $52.78 million.
The Cambodian rice sector lost its duty-free export status with the EU last Friday after the European bloc decided to impose tariffs on rice from Cambodia and Myanmar, allegedly to curb a surge in imports.
The sector will be forced to pay about $53 million in the first year based on the amount the Kingdom exported to the EU last year.
Exporters and economists have said the actual impact of rice tariffs to the EU market needs a trial period to assess consumer reaction. However, the solution to overcoming the EU’s decision is to lower operating costs to strengthen competitiveness, they said.
