Tax breaks to be extended beyond reopening
Tax breaks to be extended beyond reopening
The government has decided to extend tax exemptions to sectors ravaged by the Covid-19 outbreak, to allow businesses breathing space for recovery and boost economic growth amid a lingering uncertainty over the convergence of crises brought on by the pandemic.
Speaking at the inauguration of National Road 11 and associated roads in the Prey Veng provincial capital, Prime Minister Hun Sen noted that the move comes on the heels of the government’s decision to reopen the economy.
Still, he affirmed that the government would continue to provide tax preferences and subsidies to the most severely hit sectors as well as tourism and factory workers over the next few months, in a bid to encourage a speedy recovery in the sectors as the spread of the novel coronavirus persists.
“Even if we reopen the economy, we will continue to provide favours. Preferential tax programmes for some of the businesses – we have announced in the past. We are not finished when we reopen this country, we must continue to address the wellbeing of the people and the uncertainty ahead,” Hun Sen said.
Last month, General Department of Taxation (GDT) director-general Kong Vibol told reporters that he had asked the government to continue the tax breaks for the next few months into 2022, so as to salvage the hardest impacted sectors and ensure a quick recovery, as the Kingdom reopens with the Covid fight still very much in the background.
He confirmed that he had been notified of the decision, which he pointed out was made by the government and the prime minister.
Garment Manufacturers Association in Cambodia (GMAC) deputy secretary-general Kaing Monika on December 6 expressed appreciation for the government intervention and overall effective management of Covid-19, which he said is geared towards economic recovery and social welfare.
“The government’s effectiveness in controlling the pandemic itself and clear plan of opening up the country and economy under the ‘new normal’ is the best incentive and support for our export-oriented manufacturing sector.
“There’s no additional tax incentives for our sector, but there’s been a continued wage subsidy for workers in cases of temporarily suspended employment.
“Currently, the sector has bounced back pretty well, with positive growth compared to last year,” he said, adding that garments footwear and travel goods exports had respectively logged “moderate”, “good” and “remarkable” growth.
In the nearly two years of heavy tolls that the pandemic has taken on people’s welfare and regional and global economies, the government has rolled out 10 rounds of economic relief measures worth more than $2 billion, to manage the impact on key sectors from Covid-19 and the ongoing recovery process, and bolster economic growth during and after the crisis.
The support measures centre on the severely-hit textiles, garments, footwear, travel goods and tourism sectors, aiming to keep businesses afloat.
Late last month, Singapore-based ASEAN Plus Three Macroeconomic Research Office (Amro) forecast Cambodia’s economic growth at a moderate 2.8 per cent in 2021, tempered by uneven growth across sectors.
Amro said: “Strengthening pandemic management and implementing flexible policies to support vulnerable sectors and put the economy on a firmer recovery path remain vital, while the ongoing fast rollout of vaccines will ensure a steady economic reopening.”
