Kun Nhem, head of the General Department of Customs and Excise (GDCE), has highlighted the intended outcomes of recently announced tariff adjustments. These include lower customs revenues but a forecasted surge in Cambodian exports.

The new measures are part of sub-decree No 122, communicated at a workshop held in-person and virtually last weekend.

Nhem explained that the tariff changes, set to begin on July 1, aim to tackle inflation and stimulate trade and domestic investment. The nature of the tariffs and special taxes on export-import goods is such that they adapt to the evolving economic climate, achieving a balance of promoting trade activities, attracting investment and supporting the national budget.

The director-general emphasised the government’s commitment to using the tariff and tax sector to hasten development in priority sectors, particularly in the context of the severe impact of the Covid-19 crisis on Cambodia.

“The government is focusing on accelerating development in priority areas such as agriculture, education, health, industry and production, transportation, and environmental protection, especially given the effects of the pandemic, inflation and global downturn,” Nhem said.

Sin Chanthy, president of the Cambodia Logistics Association, spoke about the dual impacts of the tariff and tax adjustments due to be implemented on July 1. While the changes will impact the GDCE’s revenue collection, Chanthy highlighted the benefits for Cambodia’s exports.

“The tariff adjustments will affect the GDCE’s revenue, but they will also open up opportunities for Cambodian exports, as most adjustments involve reductions rather than increases. This will also support the transportation sector,” he said.

Chanthy noted that some goods have been completely exempted from tax as a result of the changes. Meanwhile, other products that were previously untaxed will now be liable for taxation.

Lim Heng, vice-president of the Cambodia Chamber of Commerce, underlined the importance of flexible tariff rates that reflect global economic trends and changes in the Kingdom’s export and import patterns.

“The adjustment of tariffs supports the domestic processing of raw materials and maximises export potential, particularly through incentives like tax exemptions,” he said.

The GDCE indicated that the large-scale tariff and tax adjustment will affect a total of 1,443 items. Some goods will see an increase in tariffs and tax, aligning them with similar items. However, the general trend is a reduction in tariff rates, signalling a fresh step towards lowering Cambodia’s trade barriers.