Logo of Phnom Penh Post newspaper Phnom Penh Post - Gov’t rolls out stimulus to keep businesses afloat

Gov’t rolls out stimulus to keep businesses afloat

Gov’t rolls out stimulus to keep businesses afloat

The government has introduced the fourth round of stimulus measures aimed at ensuring economic and social stability during the outbreak of the Covid-19 disease.

The move, which was announced on Tuesday, is designed to help businesses, factories and enterprises to stay afloat while reducing the burden on poor people through social assistance programmes.

“The fourth round of measures also focuses on helping to rehabilitate and boost business possibilities and allow businesses to contribute to economic growth in the post-crisis context,” a government statement said.

The government will ease the practice of withholding tax for local and foreign lenders. For new loans, it has decided to reduce the withholding tax rate on banks and microfinance

institutions from external and domestic sources to five per cent (borrowed from countries with agreements on Double Tax Avoidance (DTA) and the prevention of fiscal evasion and borrowing from non-DTA countries) for 2020.

The government will also lower withholding tax rates on banks and microfinance institutions from both external and domestic sources to 10 per cent (both loans from DTAs and non-existing countries) for 2021 and adjust the withholding tax rates on banks and microfinance institutions from both external and domestic sources to normal levels in 2022.

For finance sources for working capital, the Ministry of Economy and Finance will set up a “Credit Guarantee Fund” with a budget of $200 million.

The fund can secure loans using market principles to help alleviate cash flow and working capital bottlenecks of businesses in all sectors, creating at least $2 billion.

The Ministry of Economy and Finance will also allocate $300 million in additional financing to act as a catalyst to boost growth in key sectors during the crisis and thereafter.

The government has decided to expand the coverage and budget volume for the “Cash for Work” programme in 2020 to $100 million to absorb unemployed workers from factories and workers returning home from abroad.

This is expected to be achieved through local micro infrastructure and construction projects aimed at promoting agriculture and sustaining the economy.

Minister of Economy and Finance Aun Pornmoniroth said on Monday that the series of measures will stabilise seriously affected businesses and improve the lives of workers, employees and the general population.

“We have already put in place three rounds of measures already to help the private sector survive, especially in key sectors such as tourism, aviation and textiles.

“We have also stabilised the lives of workers from these sectors through fiscal exemptions – allowing them not to contribute towards employment and healthcare risks – and credit waivers,” he said.

The government also plans to launch social assistance programmes to alleviate hardship and stabilise people’s lives through cash transfers to poor families. This will be done through the “Cash for Work” programme and short-term vocational training.

Royal Academy of Cambodia economics researcher Hong Vanak said the fourth round of measures will help the private sector maintain business balance.

“The measures are always to help the people, especially the business sector because all businessmen are looking forward to government support during this time, but if Covid-19 continues to linger, the government will find it hard to help them,” he said.

A social assistance programme to help poor families and vulnerable groups with equity cards throughout the country is also underway with a special focus on children under the age of five, disabled people, people from 60 years and older, and people living with HIV.

The government will also launch the first step of the IT Business Registration Platform in early June to promote the registration of companies, in particular those that intend to apply for loans from the government’s special financing programme.

MOST VIEWED

  • Cambodia rejects UN rights claim

    Cambodia's Permanent Mission to the UN Office in Geneva on Friday hit back at David Kaye, the UN special rapporteur on the Promotion and Protection of the Right to Freedom of Opinion and Expression after he raised concerns over the repression of free speech and

  • Snaring may spawn diseases

    The World Wildlife Fund (WWF) has warned that snaring of animals has become a crisis that poses a serious risk to wildlife in Southeast Asia and could spawn the transmission of zoonotic diseases to humans. Its July 9 report entitled Silence of the Snares: Southeast Asia’

  • Ex-party leader, gov’t critic named as secretary of state

    A former political party leader known for being critical of the government has been appointed secretary of state at the Ministry of Rural Development, a royal decree dated July 9 said. Sourn Serey Ratha, the former president of the Khmer Power Party (KPP), told The Post

  • Residence cards set for over 80,000 immigrants

    The Ministry of Interior plans to grant residence cards to more than 80,000 immigrants to better keep track of them. The ministry announced the plan on July 10, following the results of an immigration census. “An inter-ministerial committee and many operational working groups have been set up

  • Kingdom, US vow stronger ties

    At an academic forum on Saturday to celebrate 70 years of Cambodia-US diplomatic ties, Cambodian researchers and officials expressed hope of encouraging US investments and for that country to deepen and improve its bilateral relations. Held at the Royal Academy of Cambodia, it reviewed the past 70

  • Fifteen Cambodians from Saudi get Covid-19

    The Ministry of Health on Sunday confirmed 15 more imported cases of Covid. The 15 men ‒ all Cambodian aged 21 to 33 ‒ arrived from Saudi Arabia on Friday via a connecting flight in Malaysia. They were travelling with 79 other passengers, three of them women. The ministry said 80 of the

  • Ministry requests school opening

    The Ministry of Education, Youth and Sport on Thursday said it would request a decision from Prime Minister Hun Sen to allow a small number of schools to reopen next month. Ministry spokesman Ros Soveacha said if the request is granted, higher-standard schools will reopen

  • Kingdom eyes India FTA, China deal set for August

    Cambodia is studying the possibility of establishing a bilateral free trade agreement (FTA) with India to open a new market with the second-largest regional economy. This comes as an FTA with China is scheduled to be signed next month while similar negotiations with South Korea

  • Judge lands in court after crashing into alleged thief

    Sen Sok district police on Thursday sent a Koh Kong Provincial Court judge to the Phnom Penh Municipal Court on manslaughter charges after he crashed his car into a woman riding a motorbike on Wednesday, killing her. District police chief Hour Meng Vang told The

  • Vietnamese workers in Koh Kong questioned

    The General Department of Immigration (GDI) is questioning 49 Vietnamese nationals who were working illegally in Koh Kong province to build a case and send them back to Vietnam, its Department of Investigation and Procedure director Kem Sarin said on Thursday. GDI forces and provincial authorities