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Customs duty cuts set for Jan 1

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Cambodia exported $14.1 billion worth of goods in the first nine months of this year, up 20.07 per cent from the same period last year. Heng Chivoan

Customs duty cuts set for Jan 1

The government has decided to slash customs tariff rates and special tariffs on some imported goods and raw materials in a bid to lift investor sentiment out of the Covid-19 doldrums.

Prime Minister Hun Sen on December signed a sub-decree to this end, which will go into effect on January 1.

The sub-decree states that customs duty on 13 tariff lines of raw materials for food and beverage production and solar systems will be reduced from seven per cent to zero.

It said 56 tariff lines of “processing machines and tools used in various production chains” will see customs duty rates cut from 15 per cent to zero, while 60 tariff lines of “major commodities and processing machines used in various productions chains” will have them trimmed down from 15 to seven per cent.

On six tariff lines of “anti-bacterial alcohol agents and other items used in industry” it will be lowered from the current 35 per cent down to seven per cent, while it will drop from 35 per cent to 15 per cent for four tariff lines of “raw materials and production inputs”.

Five tariff lines of “kitchen electrical appliances” will see customs duty trimmed from 10 per cent to five per cent, three tariff lines of “anti-bacterial alcohol agents used in the health sector” will have it lowered from 35 per cent to zero, and the tariff line of “fermentation agents [used in drinks of] alcohol content of at least 80 degrees Celsius” will have it trimmed down from 35 per cent to 15 per cent.

The sub-decree adds that the special tariff rate on 16 tariff lines of “lubricants used in the textile, dishwasher and bicycle sectors” will be slashed from 10 per cent to zero, while eight tariff lines of “lubricants involved in production” will see the rate trimmed from 25 per cent to zero.

Garment Manufacturers Association in Cambodia (GMAC) deputy secretary-general Kaing Monika said the move offers businesses and many of the Kingdom’s Covid-19-ravaged sectors a much-needed reprieve.

He said: “We’ve all been exempted from import duties for all materials to process for exports in qualified investment projects.”

At the same time, Cambodia Rice Federation (CRF) secretary-general Lun Yeng told The Post that the customs tariff adjustment would encourage more investment in agriculture.

He said: “This is a prime mechanism, especially in the adjustment of import customs tariff rates related to agricultural machinery and inputs. It’ll help lower our production costs and will gather more momentum in agricultural investments too.”

Cambodia exported $14.1 billion worth of goods in the first nine months of this year, up 20.07 per cent from the same period last year, the Ministry of Economy and Finance reported.

Topping the list of export items were milled rice, bicycles, electronic components and agricultural products such as legumes, cashew nuts and yellow bananas.

The Kingdom imported $13.6 billion worth of goods in the first nine months of this year, dipping 8.70 per cent year-on-year.


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