Cambodia cancels tax on silk materials in 2010

Samdech Techo Prime Minister Hun Sen on April 27 said that that the country has stoped the charge for importing tax on silk raw materials for producing silk products, a move to save handicraft people who earn the living from producing silk products in some provinces in the country.
“Through this measure and way we will help the weaving farmers and they could carry out their tradition work and their business, he said in fifteenth government private forum in Phnom Penh at the council of development of Cambodia (CDC).
He added the ministry of the economic and finance gained about least than 20,000 US dollars in a year from importing tax of the silk yarn. So it cancelled the importing tax and another way, it will ease to traders to buy silk products from us and could export to other countries, where competed with other products.
He noted that recently, the price of the silk materials is too high, therefore people stopped traditional weaving. The local farmers should not be upset about this policy and they have to produce good quality of silk to compete with others in free markets, he said, adding that we also has provided for three year with free VAT import of silk yarn materials.
This for three years period policy limited because it is under the government policy will be until in 2013, and. If we have new prime minister in 2013, it will have new policy for this silk material,” he joked.
The measure from Samdech Techo Prime Minister Hun Sen on the cancellation of impoartning tax on silk yarn because it has a proposal from private sector that make business on the silk products meet difficulties to produce silk because silk yarn has high price and weavers want to stop producing the traditional handicraft in the country.
Okhna Te Taing Por, co-chairmen for the working group on manufacturing and small and medium enterprises (SMEs), said that we all propose this project to the government to reduce import tariff and VAT on silk yarn to zero per cent. Now the import tariff silk yarn is 7 per cent and VAT is 10 per cent. In particular, silk weaving handicraft requested import tariff be dropped to zero and the 10 per cent VAT be shouldered by the state.

“This is to assist weavers of more than 20,000 in the provinces of Kandal and Takeo, and Prey Veng and Kompong Cham province to continue their activities,” he said. He added that there has been sharp increase of silk yarn prices globally unlike those of finished products which appear to stay at the same levels and this caused huge losses to weavers and many abandoned their careers and exposed to asset confiscated by Micro Financial Institutions (MFIs) that had loaned them earlier when these weavers were unable to repay the loans.

Va Thiek, a weaver of silk handicraft in Prek Chang krang village, Koh Sotin, Kampong Cham province said that now the price of silk and Pha –mong dropped sharply, we earned least than before. There are few middle dealers coming here to buy.

“The price of a set of the silk cost about 30 US dollar to 60 US dollars according to the quality of the finished silk products after weaving,” he told The SEAW by Phone. But besides planting rice paddy, we need other work to do, and but silk handicraft is a good one to earn extra some money from farming because we continued the in-heritage skill from the old peoples, he noted.
The cheaper price of silk yarn will help the local weavers to earn more for the silk products and reduce the difficulties of income in families, he said. ###