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Vietnamese Rubber Companies actively contribute to the socio-economic development of Cambodia

VIETRADE - Vietnamese Rubber Companies operating in Cambodia have continuously contributed to Cambodia’s social security. Despite receiving supports from the Cambodian governments, ministries, relevant agents and local authorities, Vietnamese rubber companies still have many obstacles in their operations. Hence, there is a need for continuous generation of favorable conditions and timely solution addressing unresolved hindrances from Cambodian government and relevant agencies so that Vietnamese rubber companies can develop and act as the driving force for Cambodia’s economy.

 

The above-mentioned message has been stressed at the second inter-ministerial conference on August 2nd, 2016 at the office of the Cambodian council of ministers, between Cambodia’s Ministry of Agriculture, Forestry and Fisheries, relevant agencies, local authorizes in some provinces and Vietnamese rubber companies having investment in rubber plants at the country.

 

Benefits brought about

At the conference, Mr. Huynh Trung Truc, Vice Chair of the Vietnam Rubber Group (VRG) informed that there have been 48 Vietnamese rubber companies running rubber planting projects in Cambodia, out of which, 19 are VRG members, being managed by the group to operate 19 projects across the country. Total land area granted to Vietnamese rubber enterprises by the Cambodian government is over 200,000 hectare. Total rubber planted area by Vietnamese companies is over 180,000 hectare, scattering in such provinces as Kampong Thom, Preah Vihear, Siem Reap, Molduklkiri, Ratanakiri…Currently, 3,000 hectare of rubber is ready for tapping and progressed for mass exploitation.

 

Representatives from some provinces have recognized the contributions by Vietnamese rubber enterprises to the socio-economic development locally. They also committed to work closely with Vietnamese enterprises during the implementation of the projects at the provinces.

 

Deputy Prime Minister Yim Chahay Ly appreciated contribution by Vietnamese enterprises in the socio-economic development of Cambodia, which helps maintaining the high and gradual economic growth rate of 7% over the past few years of the nation.

 

Vietnamese rubber enterprise investment in Cambodia is not only for profit but also benefits Cambodia in terms of industrial plant development, rubber plant planning, and transfer of planting and process technology, contributing to the success of Cambodia’s national strategy in agricultural development.

 

Mr. Yim Chhay Ly also stressed that Vietnamese rubber companies not only create jobs for tens thousands of local workers, pay taxes for national budget, but also invest in local  infrastructure, social security system such as healthcare centers, schools, medical stations pagodas, and many other constructions benefiting local residents.

 

Resolving hindrances

At the conference, representative from Vietnamese Embassy to Cambodia, VRG and some rubber enterprises have acknowledged the supports from Cambodian government, ministries, central and local relevant sectors and authorities as well as Cambodians for  Vietnamese rubber companies’ operation.

 

However, remaining obstacles faced by enterprises are:  taxes, particularly the irregular income tax of 20% applied to such expenditures as housing for workers, rice and food for Cambodian workers; land lease contract renewal; financial statement procedure; import of machineries and equipment, export of rubber and certificate of origin procedure; shortened land lease contract; declining rubber price; lack of understanding about Cambodia’s legal system…

 

Vietnamese rubber enterprises addressed their requests to Cambodian ministries, relevant sectors, especially tax and custom agencies to facilitate, maintain and promote rubber planting projects in the context of the world’s low priced rubber. Both sides should accelerate the progress of re-signing contracts and reduce the time-limit of land concession contracts to 50 years from 70-90 years, facilitate exports-imports and examine the legal regulations on rubber exports.  At the same time, Vietnamese rubber enterprises would like to receive special incentives by Cambodian government for this peculiar industry which is defined by long term investment, slow return on investment, and risk involvement, so that they can survive the current hardship, stay economically efficient and contribute to the long lasting socio-economic development locally.

 

Mr. Tran Ngoc Thuan, General Director of VRG requested a revision on the irregular income tax.

 

In response, Deputy Prime Minister Yim Chhay Ly urged relevant ministries and sectors to record and works on requests from Vietnamese rubber enterprises, facilitate the efficient implementation of rubber planting projects, which contribute to the local socio-economic development.

 

Responding to guidance by Deputy Prime Minister Yim Chhay Ly, representative from the Ministry of Agriculture, Forestry and Fisheries pledged to do at their best in facilitating contract renewal, complete legal procedures related to the implementation of rubber planting projects by Vietnamese enterprises.

 

Apart from this, relevant ministries and sectors would allow Vietnamese enterprises to pay their land concession tax under the land reclamation scheme, which means they would pay up to the amount of land they have actually reclaimed, instead of a lump sum payment at the beginning of the 6th year (it is regulated that Vietnamese rubber enterprises are exempted from land concession taxation in the first five years of the project operation), which would lessen the financial burden for Vietnamese rubber cultivators.

 

With regards to irregular income tax revision, relevant agencies attended the conference promised to send an urgent request to the Ministry of Finance for an official  announcement in addressing this concern.

 

According to Mr. Oknha Leng Rith, Head of VRG representative office in Cambodia, the office will closely work with Vietnamese Embassy to Cambodia and the office of Deputy Prime Minister to address remaining obstacles faced by Vietnamese rubber companies in general and VRG in particular, to provinces, cities, ministries and relevant sectors of Cambodia.



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