Private sector rejoices over new stimulus package
Private sector rejoices over new stimulus package
The private sector rejoiced as the government on Wednesday announced its sixth round of measures to stimulate economic growth as it prepares for a post-Covid-19 world.
The support measures centre on the garment, textile, tourism and civil aviation sectors, which the government labelled as the hardest hit.
For the garment sector, the government will continue providing $40 per month to factory workers who lost their jobs or had their work suspended.
The programme will continue for another three months until the end of December this year. Factory owners have to add $30 to the handout, increasing the total disbursement to $70.
The government also delayed taxes for social protection schemes.
Garment Manufacturers Association in Cambodia (GMAC) secretary-general Ken Loo lauded the measures.
Loo said: “The decision to extend the $40 scheme for suspended workers is very good. This will help affected workers tide over the difficult times and at the same time help employers.
“Employers with no current orders can apply for suspension and use the time to try and secure new business opportunities.
“The delayed taxes for social protection schemes will further ease the burden of employers,” he said.
Meanwhile, tourism sector employees, including those who work at hotels, guesthouses, restaurants and travel agencies, will receive $40 a month for three months as well. The employers must provide as much money as possible in addition to the $40.
Registered hotels, guesthouses, restaurants and travel agents will be exempt from taxes for the next three months.
The exemption only applies to tourist businesses in Kampot, Preah Sihanouk, Kep and Siem Reap provinces, Phnom Penh, Svay Rieng province’s Bavet town and Banteay Meanchey province’s Poipet town.
Pacific Asia Travel Association Cambodia chapter chairman Thourn Sinan said the government was proactive in its intervention to salvage the sinking tourism industry, but pointed out that it could have gone a little further.
“We really appreciate the help that the government has provided to our industry. But we want the government to set up a special fund for the tourism sector as it enters the post-Covid era.
“Most businesspeople in the industry haven’t received any revenue at all so we need the government consider our request once the coronavirus is contained.”
In May, the government announced a $500-$600 million low-interest loans programme for small- and medium-sized enterprises. Sinan said the government should roll out a similar scheme exclusive to the tourism sector.
Cambodia Chamber of Commerce vice-president Lim Heng highlighted that although the scope of the government measures were a bit underwhelming, it is still non-trivial intervention in the private sector.
“Although the intervention doesn’t satisfy everyone, it reflects the willingness of the government to care about the private sector. The measures could potentially save [companies in] some sectors from going bankrupt,” he added.
The government noted on Wednesday that it had additionally exempted patent and building taxes and delayed GDT audits of travel agents and operators in the tourism sector.
Minimum taxes for travel companies registered in Cambodia will be delayed for three months as well, it said.
