Logo of Phnom Penh Post newspaper Phnom Penh Post - Vehicle import duty cuts proposed

Vehicle import duty cuts proposed

Content image - Phnom Penh Post
Customs clearance revenue on vehicles fell by 40 per cent in 2020 from a year earlier. Heng Chivoan

Vehicle import duty cuts proposed

Minister of Economy and Finance Aun Pornmoniroth has proposed an adjustment on vehicle import duty, to be effective from March 1, to revive the market and buttress the logistics sector after customs clearance revenue on vehicles fell by 40 per cent in 2020 from a year earlier.

In a February 1 letter addressed to Prime Minister Hun Sen and signed by Pornmoniroth, the ministry contended that while the adjustment could hive off 122.54 billion riel ($30.26 million) in customs revenue, the move would bolster demand for imports beyond last year’s levels and partially offset the perceived losses.

On February 4, the prime minister issued a consent letter to Pornmoniroth regarding the adjustment, voicing support for the transport sector and environmental protection, and hopes that the vehicle import market would be restored.

The ministry said in its letter that the import duty for “family cars” with cylinder capacity not exceeding 3,000cc would be trimmed by 10 percentage points – from 30 to 20 per cent and from 60 per cent to 50 per cent where applicable.

For those with engines exceeding 3,000cc in size, the rate will be slashed by 15 percentage points – from 65 to 50 per cent and from 70 to 55 per cent as the case may require.

Purely electric family and passenger cars will see import duty reduced from 30 to 10 per cent, in a nod to environment protection.

Customs duty on semi-trailers and heavy lorries (over five tonnes) will be cut from 40 to 25 per cent and 40 to 30 per cent, respectively, to contribute to a reduction in logistics costs.

And dump trucks, cranes and other specialised vehicles will have import tax lowered from 40 to 30 per cent in a bid to underpin physical infrastructure construction and logistics.

The letter said a sharp decline in automotive sector revenue and a sluggish economic recovery during and after Covid-19 are major concerns and pose significant hurdles for customs revenue collection.

Cambodia Logistics Association (CLA) president Sin Chanthy welcomed the move as a show of solidarity by the head of state and ministry for the Covid-19-strained transport and logistics sectors.

He said: “I am very happy that the government has made the tariff preferences, which will help reduce the cost of customs duties. I believe that all companies in the logistics sector will increase imports of lorries to fill the shortage,” he said.

Kong Ratanak, a traffic safety expert, told The Post that the measure would provide the people with more access to cars, but suggested that it be exclusive to new vehicles, which he said are built to higher safety standards, save money and help to protect the environment.

“I encourage and support the reduction of import duties on new cars,” he said, arguing that application to used cars would motivate the import of junkers into the Kingdom, which he stressed are less safe.

Phnom Penh is thoroughly choked by traffic congestion during rush hour, he said, calling for the tightening of traffic laws, improved management of motorist behaviour and spruced-up road infrastructure to stamp out the problem.

Last year, the General Department of Customs and Excise of Cambodia collected $2.4196 billion in revenue, down $795.5 million or 24.8 per cent compared to 2019. This was equivalent to 83.5 per cent of the 2020 plan.

MOST VIEWED

  • Cambodia maintains 'Kun Khmer' stance despite Thailand’s boycott threat

    Cambodia has taken the position that it will use the term "Kun Khmer" to refer to the sport of kickboxing at the upcoming Southeast Asian (SEA) Games, and has removed the term Muay from all references to the sport. Despite strong reactions from the Thai

  • Artificial insemination takes herd from 7 to 700

    Some farms breed local cows or even import bulls from a broad for the purpose of breeding heavier livestock for meat production. One Tbong Khnum farmer has found a more efficient way. Hout Leang employs artificial insemination to fertilise local cows. Thanks to imported “straws”

  • Chinese group tours return to Cambodia starting Feb 6

    Cambodia is among 20 countries selected by Beijing for a pilot programme allowing travel agencies to provide international group tours as well as flight and hotel packages to Chinese citizens, following a three-year ban. As the days tick down until the programme kicks off on February 6,

  • Capital-Poipet express rail project making headway

    The preliminary results of a feasibility study to upgrade the Phnom Penh-Poipet railway into Cambodia’s first express railway indicate that the project would cost more than $4 billion and would take around four years to complete. The study was carried out by China Road and

  • Thai boxers to join SEA Games’ Kun Khmer event

    The Cambodian SEA Games Organising Committee (CAMSOC) – together with the Kun Khmer International Federation (KKIF) and Khmer Boxing Federation – have achieved a “great success” by including Kun Khmer in the upcoming biennial multi-sports event on its home soil for the first time, said a senior

  • Bullets to bracelets: Siem Reap man makes waste from war wearable

    Jewellery is often made from valuable gemstones like emeralds or diamonds and precious metals like gold or silver, or valueless things like animal horns. But a man in Siem Reap has approached the manufacture of delicate pieces from a different angle. His unique form of