RGC pushes to formalize informal economy

Economy and Industry

RGC pushes to formalize informal economy  The Royal Government of Cambodia (RGC) has introduced tax incentives to encourage micro, small, and medium-sized enterprises (MSMEs) in the informal economy to register with the Ministry of Commerce (MoC) and the General Department of Taxation (GDT). Under Sub-Decree No. 113, MSMEs that voluntarily register within specified timeframes will receive exemptions from most penalties, fees, and tax obligations. This includes exemptions for micro-enterprises registering between 2023 and 2028 and small enterprises from tax liabilities and registration fees for prior non-compliance. Medium-sized enterprises registering between 2024 and 2025 will also be exempt from income tax and minimum taxes for two years post-registration. Despite these tax breaks, MSMEs must maintain full accounting records and submit tax returns. The initiative aims to transition informal businesses, defined as those operating without legal status or regulation, into the formal economy, supporting business growth and standardizing the national economy. The National Strategy for Informal Economic Development 2023-2028 complements this by easing formal system access and providing social support. (Source: Khmer Times)

Petroleum and diesel imports surged 23% in the first five months Cambodia's petroleum and diesel imports surged by 23% to $1.06 billion in the first five months of this year, per the General Department of Customs and Excise. Diesel imports increased by 20% to $641 million, while petrol imports rose by 30% to $432 million. Lim Heng, Vice President of the Cambodian Chamber of Commerce, attributed this rise to improvements in the domestic production chain despite global demand fluctuations. Cambodia imports fuel from Singapore, Thailand, and Vietnam but aims to develop local oil resources under the Khmer seabed and Tonle Sap. KrisEnergy's attempt to establish a domestic oil production base in 2020 was short-lived due to bankruptcy. The Ministry of Mines and Energy projects oil product demand to hit 4.8 million tons by 2030, up from 2.8 million tons in 2020. OPEC forecasts rising global oil demand, especially from Asia. Currently, petrol and diesel prices are 4,100 riel ($1.01) and 4,000 riel per liter, respectively. (Source: Khmer Time)

Indonesian minister supports acquisition of Cambodian rice companies Indonesian Agriculture Minister Andi Amran Sulaiman expressed support for state-owned logistics company Bulog's plan to acquire rice companies in Cambodia to bolster Indonesia's rice stocks. He emphasized the importance of this acquisition aligning with domestic initiatives to enhance food resources, including creating new rice fields, optimizing existing ones, and improving irrigation systems. Sulaiman noted that Indonesia aims to maintain rice self-sufficiency with minimal imports, ideally not exceeding 10%. He also highlighted the distribution of water pumps across provinces as a short-term solution to counter the expected drought from July to October. Coordinating Minister for Maritime and Investment Affairs, Luhut Binsar Pandjaitan, confirmed Bulog's acquisition plans, following direct orders from President Joko Widodo. Bulog CEO Bayu Krisnamurthi stated that the company is prepared to explore collaboration opportunities with Cambodia, continuing efforts started in 2023 through business-to-business and government-to-government agreements. (Source: Khmer Times)

Corporate News

Chinese firms plan to open a textile factory Shanghai Shunkai International Freight & Forwarding and CID Logistic are planning to build a textile and dyeing factory in Cambodia. During a meeting with CDC advisor Lor Tith Chansopheak, the delegation expressed their interest in exploring investment opportunities. Chansopheak highlighted Cambodia's favorable investment regimes and incentives. The project aims to boost Cambodia's economy and attract more foreign investment in the garment sector, aiming to further improve bilateral relations between Cambodia and China. The Vice President of Cambodia Chinese Chamber of Commerce (CCCA), Lor Vichet, noted that most foreign investors have major concerns over tax policies, labor productivity, and electricity costs, which greatly affects the competitiveness of its products. Additionally, he highlighted Prime Minister Hun Manet's visit to Singapore where both parties discussed ways to reduce the cost of electricity, which plays an important role in convincing foreign investors to expand their business operations within ASEAN including Cambodia. (Source: Khmer Times)

Stock Market

CSX index rises by 0.34% on June 21, 2024 On June 21, 2024, the CSX index closed at 409.7 points, up 0.34% from the previous day. The main board saw gains in PAS (+1.99%), GTI (+0.85%), ABC (+0.53%), and PPSP (+0.46%), while PWSA (-0.29%) experienced a decline. PPAP, PEPC, MJQE, and CGSM remained unchanged. On the growth board, JSL remained unchanged, while DBDE decreased by 0.44%. The total trading volume was 98,831 shares, with a cumulative trading value of KHR 563 million. (Source: YSC Research)

CSX Index

Stock Performance

Valuation Ratios

Trading Summary

Historical Issuance Summary

Main Board

Growth Board