Minister of Economy and Finance Keat Chhon told the National Assembly that the government provided $490 million in tax and VAT subsidies to all sectors in 2008

Garments got $400m subsidies, says govt
Written by Chun Sophal
Friday, 29 May 2009

THE government on Thursday said that it had spent around US$400
million last year on helping Cambodia's struggling garment and apparel
industries survive the global financial crisis.


Minister of Economy and Finance Keat Chhon told the National Assembly
that the government provided $490 million in tax and VAT subsidies to
all sectors in 2008. Around $400 million in subsidies went to the
garment sector.

He also said that the government has not imposed customs duty or VAT
on imports and exports of garments since 2005, so buyers should not
claim that Cambodia's clothes are overtaxed.

"We spend large amounts of money on supporting the garment industry,
so the Garment Manufacturers Association of Cambodia (GMAC) should
inform the public of this," said Keat Chhon, who added that the
government currently waives tax on clothing imports and exports to
encourage factories to compete overseas.

The government will also waive its 1 percent per month advanced profit
tax during 2010 and 2011 and help pay 0.3 percent of occupational-risk
funds for garment workers in 2009 and 2010, said Keat Chhon.

According to a GMAC report, the garment industry imported $1 billion
in raw materials, and exported about $2.9 billion in 2008.

Kaing Monika, external affairs manager at GMAC, said Thursday that it
is difficult to assess the exact amount of financial assistance
provided to the industry because import tax is calculated by the
government.

He also said that GMAC acknowledges that the government has made
efforts to help the sector, including providing tax breaks for three
to four years to new businesses.

"I think it is the government's calculation," said Kaing Monika. "GMAC
is not sure about this issue."
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