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Rubber tax rate adjusted to assist struggling farmers

Chea Vannak / Khmer Times Share:
A rubber farmer in Ratanakiri province collects dripping raw sap from his rubber tree plantation. KT/Chor Sokunthea

Prime Minister Hun Sen has signed a sub-decree to completely exempt export tax on rubber that is sold below the market price of $1,400 per tonne, adjusting from the previous $1,000 per tonne market rate.

Mr Hun Sen said the export tax has been adjusted to assist local rubber plantations after calls from the private sector to help the struggling rubber industry in Cambodia.

The sub-decree stated that rubber will now start being taxed $25 per tonne if the market price is over $1,400, $50 per tonne between $1,800 and $2,500, $100 per tonne over $2,500 and $200 per tonne over $3,500 per tonne.

The newly adjusted tax rates will come into effect in April this year.

Lim Heng vice-president of An Mady Group, an international rubber exporter, applauded the newly adjusted tax rates. He said the adjustment will help ease the costs as the market is currently very low, around $1,300 per tonne.

“Rubber plantation owners are very happy with the newly-adjusted export tax rates. The adjustment will ease the burden on the rubber sector, as currently with such low market prices, many owners are running their businesses at a loss,” Heng said.

The adjustment is also an incentive from the government to stop farmers from removing rubber trees from their land and planting more currently economically viable crops, he added

In 2019 Cambodia exported 282,071 tonnes of dry rubber, up from 217,501 tonnes the year before, representing a 30 percent increase, according to the Ministry of Agriculture’s annual report.

The Cambodian Government received around $377 million from rubber exports in 2019, an increase from $286 million the year before, representing a 31.8 percent increase. One tonne of dry rubber cost on average $1,336 in 2019, a $19 increase from the year before, according to the same report.

The full list of previous rubber export tax rates were: $100 per tonne if the market price is between $1,000 and $2,000 per tonne, $150 per tonne between $2,000 and $3,000 per tonne, $200 per tonne between $3,000 and $4,000 per tonne and $400 per tonne over $4,000 per tonne.

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