WSG Article: Cambodia: Additional Measures to Support Private Sector Workers & Revive the Post-COVID-19 Economy (Round 8)

Cambodia: Additional Measures to Support Private Sector Workers & Revive the Post-COVID-19 Economy (Round 8)

March, 2021 - Segolene Leffy

On 25 March 2021, the Royal Government of Cambodia (“RGC”) implemented ‘Round 8’ of measures aimed at mitigating the impacts of COVID-19 on businesses and workers in Cambodia. The RGC in their press release noted the positive update with respect to the development of COVID-19 vaccines and the fact that Cambodia has to date managed to effectively control COVID-19. The RGC made the point that without 100% clarity about the safety, quality and effectiveness of the vaccine and the issues faced by countries with respect to the transportation and storage of the vaccine that there is still a great deal of risk around potential future COVID-19 outbreaks meaning that Cambodia cannot return to normalcy immediately. This is evidenced by, “the 20th February event” which has increased the number of COVID infections and has led to the first recorded COVID deaths in Cambodia.

A number of the measures outlined in Round 8 have extended previous measures that were provided by the RGC in the earlier rounds of relief implemented in 2020.

Of note for this Round 8, is the instruction by the RGC to Ministries, State Institutions and the advice to private landlords of business and factory premises to be flexible when dealing with tenants who are unable to pay their rent by the due date and to avoid terminating the lease agreement or evicting tenants in such circumstances. The RGC encourages landlords of tenants that run businesses and factories to negotiate in good faith with tenants to delay rent payments and revisit the amount of rent that is being charged.

In addition, the RGC has called on real estate developers to implement the Joint Statement of the Ministry of Economy and Finance and the National Bank of Cambodia on the outcome of the meeting on Real Estate Issues of 22 March 2021 where real estate developers were called upon to ease payments conditions for their customers during the COVID-19 pandemic.

We outline the other measures included in the Round 8 below:

1. Further measures to support the garment, textile, footwear, travel products, bags, and tourism sectors

The RGC will continue to implement measures that provide aid to suspended employees and workers in certain segments of the private sector. This includes those in the garment, textile and footwear (“GTF”) sectors, as well as certain segments of the tourism sector, that are registered with the Department of Labour and Vocational Training (“DLVT”), the Ministry of Commerce (“MOC”), the General Department of Taxation Cambodia (“GDT”) and, where applicable, the Ministry of Tourism (“MOT”).

Those suspended workers, subject to their current status being certified with appropriate documentation, will continue to be eligible to receive government subsidies of USD 40 per month for a further period of three months, until the end of June 2021. An additional USD 30 per month contributed by employers will be available to GTF sector workers (amounting to a total of USD 70 per month for such workers).

Hotel, guest house, restaurant and tourism workers will be eligible to receive USD 40 per month for a further period of three months, until the end of June 2021. In addition to the Government subsidies, enterprises and businesses in the tourism sector may provide financial contributions to their employees on a voluntary basis or subject to their financial capacity.

In addition:

Monthly tax exemptions that had been provided to hotels, guesthouses, restaurants and travel agents registered with the GDT that operate in Phnom Penh, Siem Reap, Preah Sihanouk, Kep, Kampot, Bavet and Poi Pet will be extended for three more months (from April 2021 to the end of June 2021), noting that these business still have an obligation to submit their tax returns and use E-VAT every month during the exemption period;
The exemption of the obligation to make monthly contributions to the National Social Security Fund (“NSSF”) for occupational risk and healthcare schemes during any period of business suspension will continue to be extended.

2. Further measures to support aviation sectors

The Minimum Tax exemption provided to all airline entities operating in Cambodia will be extended for three more months (April 2021 to the end of June 2021).

There will be a delayed due date with respect to the payment of aviation fees by airline entities operating in Cambodia for a further period of three months until the end of June 2021 with the permission for those airline entities to settle those payables via installments after the suspension period.

3. Financial support program for poor and vulnerable families

The program to provide cash benefits to poor and vulnerable families that were hit particularly hard during the COVID-19 pandemic is extended by three more months (April 2021 until the end of June 2021).

All relevant ministries are directed to implement these instructions immediately, efficiently and without delay.

The RGC will continue to monitor the COVID-19 situation along with the economic and financial climate both locally and globally, in order to assess and take action where necessary to ensure the welfare of all priority sectors of the Cambodia economy. This is in keeping with the RGC’s aims to stabilize and revitalize the national economy and restore economic growth as the effects of the COVID-19 pandemic gradually begin to subside.

The information provided here is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.

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