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Article

27 Mar 2020

Author:
SoK Chan, Khmer Times

Cambodia: Govt. issues an income tax exemptions directive for factories producing textile & garment, footwear and luggage after EC's EBA decision

"Government permits tax exemptions on specific goods", 27 March 2020

The government has issued income tax exemptions for the textile and garment, footwear and luggage sectors that produced export goods hit by the European Union’s 20 percent Everything but Arms (EBA) tariff-free status...

The move was announced in a directive from the Ministry of Economy and Finance.

The cut will last six months for those factories and enterprises suffering a 20 to 39 percent loss in income. They will receive an annual 50 percent tax cut.

Companies that will be hit by between 40 to 100 percent by the EBA trade deal withdrawal will get a year’s tax exemption of 100 percent...

“To receive the income tax exemption, all the factories and manufacturers operating in the textile, garments, shoe and travelling bag and hat sectors must submit supporting documents on the actual impact from the EBA trade-free withdrawal to the tax administration offices during their annual tax declaration,” said the directive...

“The withdrawal of tariff preferences – and their replacement with the EU’s standard tariffs – will affect selected garment and footwear products and all travel goods and sugar,” according to the statement by the European Commission, the EU’s civil service...

Kaing Monika, Deputy Secretary-General of Garment Manufacturing Association of Cambodia (GMAC), told ... that the exemption of tax on profits is not to release the burden on the industries, especially because some main buyers have suspended orders from Cambodia because of the Novel Coronavirus (COVID-19) pandemic.

Supplies and supply routes have been affected negatively...

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