Cambodia postpones levying profit tax on garment, footwear

[XINHUA]

PHNOM PENH, Nov. 23 -- Cambodian Prime Minister Hun Sen announced Wednesday the government would give an exemption on the profit tax for the kingdom's garment and footwear factories until 2015 in exchange for the 5 U.S. dollar increase of wage by the manufacturers to the workers.

"The manufacturers asked the government to delay taking the profit tax of one percent a month from them until 2015 so that they would give an additional 5 U.S. dollars per month to each of the garment and footwear workers for healthcare," he said during the 16th Government-Private Sector Forum.

"Now, I agree on that and the agreement will come into effect from January 2012," he said.

The government estimated the tax loss of 1.23 million U.S. dollars a month or 15 million U.S. dollars a year, he said.

"It is for the benefit of the workers to get additional 5 U.S. dollars for healthcare," he said.

The garment industry represented more than 90 percent of Cambodia's total exports. The sector has 262 garment factories employing 319,313 workers and 36 foot-wears factories with 56,643 workers, according to the reports of the Commerce Ministry.

Currently, the minimum monthly wage for a worker is 61 U.S. dollars.