Wednesday, 29 December 2010
Chun Sophal
The Phnom Penh Post
CAMBODIA’S tax on oil imports came under fire from opposition members as too high yesterday, but government officials maintain the duties are a necessary source of income for the national budget.
The Kingdom will have difficulty competing with its neighbours if it does not cancel or reduce rates on the oil import tax, said Sam Rainsy Party senator Yim Sovann.
High import taxes have caused oil prices to increase on domestic markets compared to countries like Thailand and Vietnam, which encourages illegal smuggling, he said.
“The cancellation of this import tax will result in a loss for the national budget,” he said. “But we will gain benefits for our economy and people because we can produce more finished products at low prices for exports to international markets.”
The government collects 1,200 riel (US$0.30) per litre of import oil, according to Yim Sovann. Higher oil prices increased the costs for Cambodia’s goods, making it challenging to compete with products from other countries.
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