A Change of Guard

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Monday, 18 April 2016

ELCs earn just $5M for gov’t

A woman collects cassava at an ELC in Kratie’s Snuol district in 2012. Last year the ministry of agriculture collected $5 million in tax revenue from land concessions.
A woman collects cassava at an ELC in Kratie’s Snuol district in 2012. Last year the ministry of agriculture collected $5 million in tax revenue from land concessions. Heng Chivoan

ELCs earn just $5M for gov’t
ppp Mon, 18 April 2016
Ananth Baliga and Vong Sokheng

The bulk of Cambodia’s economic land concessions (ELCs) – at the centre of numerous land disputes and human rights concerns over the past two decades – generated just $5 million for state coffers last year, with critics attributing the meagre returns to a lack of collection capacity as well as simple corruption.

The figure was made public last week during a power transfer ceremony for outgoing Agriculture Minister Ouk Rabun, who said the 1.4 million hectares of concessions under his ministry’s control generated close to $5 million in 2015 from 173 concessionaires, according to state-run media outlet Agence Kampuchea Presse.

With close to 2 million hectares in land concessions, divided between the Agriculture Ministry and Environment Ministry, concessionaires are expected to begin paying annual land rental fees to the government six years after being awarded the concession, with these fees ranging from $5 to $10 per hectare based on the type of land being leased.

Opposition lawmaker Son Chhay said last year’s lethargic collections were unacceptable, attributing this to a lack of “serious intention” on the government’s part to develop the land for revenue generation.

“They are looking to pocket the money from these land concessions,” he said.

According to Chhay, having multiple government ministries in charge of concessions only resulted in confusion.

“So when it comes to collecting [fees], it is confusing, because we don’t know which ministry does it, even though [collection] was supposed to be under the Ministry of Finance,” he said.

While admitting the low revenue could to some degree be attributed to insufficiencies in the government’s collection capacity, fees of “around $5 to $6 per hectare” were “funny”, said San Chey, director of the Affiliated Network for Social Accountability.

“While the government is looking to attract investment, both local and foreign, the tax rate is too low,” Chey said. “The government should review this mechanism to increase taxes from the concession program.”

Given that the Cambodian taxpayer is not seeing the benefits that should materialise from the concessions policy, Chey said the government should make these agreements public so that people can see whether the right amount of tax is being collected.

Latt Ky, head of the land section at rights group Adhoc, echoed that thought, saying it was difficult to create a monitoring system for land concession revenues given that there was no transparency and that “all the contracts were not available for the public” to peruse.

Agriculture Ministry spokesman Eang Sophalleth declined to comment as he had not seen the report, and neither Sao Sopheap, spokesperson for the Ministry of Environment, nor Lor Raksmey, spokesman for the Ministry of Agriculture, Forestry and Fisheries could be reached for comment.

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