Economists Welcome PM’s Income Tax Exemption Decision for New Garment and Footwear Manufacturers

Economists have welcomed the recent decision by the Royal Government of Cambodia to exempt new garment and footwear investors from income tax for nine years, according to local media report.

The source quoted a senior economist at Phnom Penh-based Emerging Markets Consulting (EMC) Mr. Chou Ngeth viewing that the decision will further promote the sector in Cambodia.

Garment and footwear manufacturers, he added, are entitled to 20 percent of income tax, so with the tax exemption decision more investors will look into opportunity to operate their business in Cambodia.

Another well-rounded economist, the Deputy Secretary-General of the Garment Manufacturers Association in Cambodia (GMAC), Mr. Kaing Monika shared similar analysis, while also encouraging the government to also consider more preferences for existing manufacturing, including annual payment of income tax and reduction of documents and transportation fees.

In his meeting last week with garments and footwear workers at Vattanac Industrial Park II, Prime Minister Samdech Akka Moha Sena Padei Techo Hun Sen announced the nine-year income tax exemption in exchange for better condition for Cambodian workers.

This is not the first tax exemption, according to the report, for garment and footwear sector � a leading drive of Cambodia’s economy � by the Royal Government of Cambodia.

Under the leadership of Samdech Techo Hun Sen, the government had exempted the manufacturers from income tax for five years in the past in order to promote the sector.

Source: Agency Kampuchea Press