Investment Hightlights
Cambodia Weekly Financial News
2023-11-25View Times｜ 1063
Cambodia Weekly Financial News
November 20 ~ 24, 2023
20 November 2023
Nation nears tax collection target amid challenges
The government has amassed over $3 billion in taxes during the first ten months of 2023, reaching 85.87% of the target set by the 2023 Law on Financial Management. The General Department of Taxation (GDT) has pledged to enhance work efficiency in the future, particularly in aiding the private sector, following directives from Prime Minister Hun Manet. For the first ten months of 2023, total tax revenue amounted to 12.421 trillion riels ($3.018 billion), equating to 85.87% of the budget target. In October, the government collected approximately 1.055 trillion riels (about $256.39 million) in taxes, representing 7.29% of the planned yearly goal. “The GDT remains attentive to the advice of the Minister of Economy and Finance [Aun Pornmoniroth], which provides further guidance for enhancing taxpayer services, addressing the private sector and public challenges, increasing tax awareness and education and executing tasks in accordance with the Standard Operating Procedures [SOP] for all work and tax-related processes,” Kong Vibol, director-general of the GDT stated.
Source : The Phnom Penh Post
20 November 2023
PPSP green bonds before next year Q3
The publicly-listed Royal Group Phnom Penh Special Economic Zone Plc (PPSP) is planning to issue green bonds by next year, most possibly before the third quarter, on Cambodia Stock Exchange (CSX) as part of efforts to raise capital for eco-friendly infrastructure expansion. In a statement obtained by Khmer Times, PPSP said the bond volume is initially considered in the range from $10 million to start with, and to the ceiling of not exceeding US$20 million. The Securities and Exchange Regulator of Cambodia (SERC) has been working closely with the International Capital Market Association to promote the issuance of green bonds in the country. “Royal Group Phnom Penh SEZ Plc is in the process of requesting approval from the Securities and Exchange Regulator of Cambodia (SERC) and Cambodia Securities Exchange (CSX) in accordance with applicable laws and regulations which is expected to be completed by early next year.”
Source : Khmer Times
20 November 2023
E-commerce tax revenue surges through October
Cambodia garnered $62.8 million in e-commerce value-added tax (VAT) revenue during the first ten months of 2023, signifying a surge in electronic products and services in recent years. The income was collected from 82 non-resident taxpayer enterprises, supplying digital-related goods from abroad, according to the General Department of Taxation (GDT). Kong Vibol, director-general of the GDT, stated in the report that levies on e-commerce is a burgeoning source of funds for the country. The government commenced the implementation of the contribution earlier this year, applying it to companies including Google, Facebook, YouTube, Alibaba, Microsoft and TikTok. “Cambodia sees it has the potential to further increase the national budget revenue,” he said, adding that taxing foreign transactions also levels the playing field for local operators.
Source : The Phnom Penh Post
21 November 2023
Iron, steel imports up slightly in 2023 despite October dip
Cambodia imported nearly $306 million worth of iron and steel in the first 10 months of 2023. The import value in October fell by more than 15% year on year, according to the General Department of Customs and Excise of Cambodia (GDCE). For October alone, Code 72 imports amounted to $25.44 million, down 15.4% from $30.09 million in October 2022, according to the GDCE. Chiv Sivpheng, general manager of the Cambodia Constructors Association (CCA) mentioned that purchases of Code 72 products from abroad are likely to increase from 2024 onwards. “In recent times, I have noticed that buildings left unfinished for the last two-three years have started to be rebuilt due to the increasing demand for rent, especially from Indonesian and Chinese investors, for both accommodation and business,” said Im Seng Hour, branch manager of Century 21 Zillion Holding in Sihanoukville. The Kingdom’s imports of Code 72 goods amounted to $359.9 million in 2022, marking a 23.1% increase from the $292.4 million recorded in 2021. The expenditure accounted for approximately 1.2% of the country’s total imports, which amounted to $29.94 billion in 2022, as per the GDCE.
Source : The Phnom Penh
21 November 2023
Cambodians can pay "riel" to 83 million traders in the world
The National Bank of Cambodia on November 15, 2023 signed a Memorandum of Understanding with AliPay Connect Pte. Ltd. On "Cross-border Payment Cooperation via QR Code". The MOU will allow local merchants using the National Bank of Cambodia's "KHQR Bakong" payment system to make payments to more than 83 million Alipay users or merchants worldwide. The MoU signing ceremony was organized by Ms. Chea Serey, Governor of the National Bank of Cambodia and Mr. Douglas Feagin, Senior Vice President of Ant Group in Singapore, with the aim of promoting cross-border payment transactions via QR Code between KHQR Code network. According to the National Bank of Cambodia, through this cooperation, Bakong users can make payments with 83 million Alipay merchants worldwide, and international tourists visiting Cambodia can also make payments through KHQR. It should be reminded that Cambodian traders must have an account in riel and accept riel.
Source: The Cambodia China Times
22 November 2023
Time for Cambodia to develop bond market
It is the right time for Cambodia to establish a government bond market, a senior International Monetary Fund (IMF) official told Khmer Times. Earlier, the Asian Development Bank (ADB) urged Cambodia to develop the local market for both corporate and government bonds while promoting local currency issues. “Local government bond issues could help diversify the nonbank financial sector and deepen local capital markets,” it pointed out. At the same time, “government bond issues would help to establish a risk-free benchmark for pricing locally issued corporate bonds.” They would also attract long-term institutional investors in addition to banks — such as insurance companies and pension funds — to deepen the market. “Efforts to develop a riel-denominated bond market face the challenge of pervasive dollarization in Cambodia. Yet local currency bonds would be consistent with the broader goal of expanding the use of the riel.”
Source: Khmer Times
22 November 2023
PBOC, National Bank of Cambodia sign MoUs on cooperation
The People’s Bank of China (PBOC) and the National Bank of Cambodia signed two Memorandums of Understanding (MoU) on Tuesday to enhance financial cooperation. Pan Gong Sheng, governor of PBOC and head of the State Administration of Foreign Exchange, met with National Bank of Cambodia’s governor Chea Serey in Beijing, according to a PBOC statement. The two parties exchanged views on boosting bilateral financial cooperation and jointly signed the memorandums, one on cooperation on establishing yuan clearing arrangements in Cambodia, and another on cooperation on financial innovation and payment systems.
Source: Khmer Times
23 November 2023
Public debt remains sustainable, says PM
The government’s public debt remains sustainable as the country is seeking more foreign debt used for building infrastructure, said Prime Minister Hun Manet. “The demand for the national budget is high, so foreign loans are needed to build infrastructure,” he said, adding, “Foreign loans are well managed and have a clear plan. In particular, loans for development serve the public interest, expand economic potential and benefit the people.” Cambodia’s public debt stood at $10.72 billion by the end of the first half of the year, remaining low risk, according to a report by the Ministry of Economy and Finance. While 64 percent of the public debt came as borrowings from bilateral development partners, multilateral development partners accounted for 36 percent and public domestic debt amounted to 0.43 percent, the report said. Besides, the Cambodian government is raising funds from domestic sources. For 2023, the government planned to raise $200 million from bonds, which can provide direct revenue and ensure investment efficiency and sustainability of debt management.
Source: Khmer Times
23 November 2023
$130M set for electricity subsidies
The government has allocated approximately $130 million to offset losses in electricity consumption this year, aiming to support the populace, especially key economic sectors, according to the Ministry of Mines and Energy. Energy minister Keo Rattanak noted that the industrial sector will benefit from reduced electricity prices from October to December this year. However, he cautioned that a permanent reduction in price is unfeasible as it might risk the bankruptcy of the country’s electricity institution, Electricite du Cambodge (EDC). He expressed concern that despite government support and encouragement to the industry through budget allocation, tax incentives and reduced power prices, the initiatives would be ineffective if the private sector remains complacent and does not strengthen itself post-pandemic. Rattanak added that in the nearly three months of the government’s seventh mandate, the mining and energy sector continues to fulfil its pre-election promise of providing sufficient power supply, committing to not increase prices and striving to reduce them to a level acceptable for the people, private entities and the government.
Source: The Phnom Penh Post
23 November 2023
World Bank revises Kingdom’s ’23 growth forecast
The World Bank has revised its economic projection for Cambodia to 5.4% in 2023 – a decrease of 0.1% from its 5.5% forecast in May. The adjustment is due to global and regional uncertainty stemming from the ongoing Russia-Ukraine war and geopolitical competition among superpowers. The report anticipates growth to pick up to 5.8% in 2024 and 6.1% in 2025. According to the World Bank, despite significant investments in public infrastructure, the country’s limited transport and logistics capacity, along with an unreliable energy supply, continue to impose high costs on businesses and consumers. “To sustain economic growth, Cambodia needs to support the private sector as the engine of growth, and this can be achieved by prompt actions to improve public sector performance,” she said. “Maintaining financial stability is also a priority, and more efforts are needed to restore fiscal space.”
Source: The Phnom Penh Post
23 November 2023
World Bank approves $163M enhancement for clean water supply
Approximately 175,000 people across four provinces will benefit from access to clean water resources, following the World Bank’s approval of a $163 million project aimed at bolstering Cambodia’s water supply and sanitation services. The Washington-based multilateral lender announced the fund was approved on November 21 to enhance safe water access in Battambang, Pursat, Mondulkiri and Kandal provinces. “The six-year Water Supply and Sanitation Acceleration Project will bolster government initiatives to increase access to safe water supply and sanitation, enhance the operation and maintenance of existing systems and ensure the sustainability of services,” the bank stated. The project incorporates a component to maximize finance for development, collaborating with private operators – who provide over half of the country’s piped connections – to secure an additional $17.6 million in private funding for expanding supply services.
Source: The Phnom Penh Post
24 November 2023
RMAC Q3 witnesses significant profit dip
RMA (Cambodia) Plc (RMAC), an automotive, heavy equipment, engineering and food services conglomerate listed on the Cambodia Securities Exchange (CXS), experienced a marked decline in business performance in the third quarter of 2023. The downturn was attributed to the economic slowdown, adversely impacting demand in the automobile industry. In its November 22 filing to CSX, RMAC reported a significant drop in revenue for Q3 2023. Earnings amounted to 366.7 billion riels ($89.23 million), a 53.3% decrease compared to the same quarter in 2022. Profits for Q3 2023 stood at 13.2 billion riels (3.221 million), falling by 86.5% from Q3 2022. As of the end of Q3 2023, the company’s total assets were valued at 1.067 trillion riels ($259.6 million), representing a 19.9% increase from 889.3 billion riel ($218.8 million) as of December 31, 2022. Total liabilities at the end of the quarter reached 531.7 billion riels ($129.4 million), up 17.8% from 451.4 billion riel ($109.8 million) as of year-end 2022.
Source: The Phnom Penh Post
24 November 2023
Online tax filing system made easy, says GDT
To simplify the process of filing tax returns on income, a special seminar was organized by the General Department of Taxation (GDT) and Cambodian Footwear Association at the Singapore (Cambodia) International Academy on Wednesday. ‘Seminar on Tax on Income and online annual tax filing management system (ToI E-Filing),’ dealt with the complexities of filing tax returns. Eng Ratana, Director Department of Large Taxpayers, told Khmer Times that all taxpayers have to file tax returns on their own every month and at the end of the year they have to fill out the form of income to submit to the General Department of Taxation (GDT). The whole process has been made easier and the taxpayer saves costs and the process to pay taxes has been made easier. Most people in Cambodia and also in the world tend to use electronics so GDT led the way in introducing eFiling and electronic payments. GDT, they have been using electronic payment system since 2020-21 at the height of the pandemic.
Source: The Phnom Penh Post
24 November 2023
Indonesia trade, commerce links poised to grow
Minister of Commerce Cham Nimul met with Indonesian Ambassador Santo Darmosumarto on November 22 to focus on deepening trade cooperation. Indonesia became Cambodia’s 6th largest trading partner this year, marking a substantial jump from the 12th place in held in 2022. Indonesia’s trade with Cambodia surged to $862.215 million by October 2023, while the total for the whole of 2022 was $948.533 million. This increase has raised expectations that bilateral trade might exceed $1 billion for the first time. Nimul proposed the formation of a joint working committee to enhance interactions and coordination between the two countries. She also suggested establishing a dialogue mechanism between the ministry and the Indonesian business community in Cambodia. This initiative aims to address business challenges, streamline trade processes, and foster a more business-friendly environment. Addressing some concerns of the Indonesian business community in Cambodia, the ambassador stressed the need for increased consultation and cooperation to improve the ease of doing business.
Source: The Phnom Penh Post
Lady Aegies Comment : To be continue...............
