Meeting with H.E. Dr. Phan Phalla, Secretary-of-State at the Ministry of Economy and Finance to discuss Cambodia’s Economic Recovery Plans in the Aftermath of the COVID-19 Crisis
Secretary-of-State H.E. Dr. Phan Phalla (Ministry of Economy and Finance) virtually met with EuroCham last Friday to discuss Cambodia’s economic recovery plans in the aftermath of the COVID-19 crisis. The Royal Government invited us to submit recommendations on behalf of the private sector, to assist in the development of policies that would jumpstart Cambodia’s economic recovery. EuroCham Cambodia presented nearly 50 recommendations for economic recovery to the Royal Government, in particular focusing on the automotive industry, the construction- and real estate sector, digital and ICT, “green business”, logistics, taxation and the highly distressed tourism-and hospitality sector. The recommendations are a mix of short-term ‘quick wins’, which are easily implementable policy measures, and of middle-and long-term measures. Where some recommendations are aimed at safeguarding companies’ cash flow, others seek to improve the ease of doing business in selected sectors or to boost the larger economy. We continue to work with the Royal Government through dedicated working meetings, to assist our members and all entrepreneurs in Cambodia to build back better.
A thread throughout the recommendations is catalyzing the development of Cambodia’s Industry 4.0 and stimulating a green and sustainable economy, while safeguarding the government’s tax revenue. EuroCham is confident that, for example, Cambodia could pioneer by speeding up the launch of 5G and thus increase its attraction as a modern investment destination for new technologies. EuroCham further recommended that the government would focus more on stimulating the ‘green economy’, such as through granting priority for permit approval for building projects that have a green building certification, adapting the current regulations in relation to rooftop solar power and adopting incentive schemes in relation to new energy efficiency and green building standards.
On the logistics part, EuroCham amongst others identified a clear need to simplify the customs clearance procedure for low-value dutiable goods in accordance with the WCO’s Immediate Release Guideline and to simplify digital payment of import tax. EuroCham also requested to delay the implementation of the Capital Gains Tax for an additional year, so the tax would come into effect earliest 2023. This measure aims to help to continue to attract investments, in particular in the real estate- and construction sector. Via proposals to revise taxes in the airline industry, EuroCham believes more airlines could be attracted to expand their flight routes into Cambodia, ensuring a greater connectivity of the country. Our extensive tourism and travel recommendations range from practical recommendations on how to urgently address the travel- and entry requirements to Cambodia to a wide array of suggested support measures for the sector.