Cambodia: Govt Response To COVID-19

On 28 February 2020 due to shortage of raw materials, the government of Cambodia issued a directive allow factory owners to apply for suspension of worker employment contracts. During the suspension, the employer may pay 40% of the minimum wage for 2020 (i.e. $190) and must have those employees who are discharged or terminated to enroll for soft skill training. Where any employer enrolls its employees in soft skill training program those employees shall receive an addition of 20 % of the minimum wage for 2020 as an allowance from the Royal Government as per its training schedule.  Factory owners may also apply to suspend the payments of NSSF by applying to the Ministry, however, this a suspension will not apply to benefits such as the health care and allowance for birth.

On 24 March 2020 Ministry of Economy and Finance introduced a Prakas on Tax Measures to Mitigate Effects of Challenges on Textiles and Garments Enterprises, effected due to partial withdrawal of EBA is all factories in this sector having loss from 20 % to 39 % will be granted 50% exemption for 6 months, while those with 40 % to 100 % will be granted for one year.

Further, on 31 March 2020 the government provided further relief to support private sectors and employees by considering other sectors such as the following:

2. Aviation sector

• Exemption of Minimum tax for 3 months from March to May 2020 for Cambodia Airlines
• Delay payment of civil airfare for six months with permission from the airlines to process the debt after this period.

3. Tourism Sector

Any individual or person or entities engaged in this sector and registered with General Department of Taxation is exempted from payments of all types of monthly taxes for three (3) months until May 2020 but is obligated to file its tax return and payment of E-VAT every month during this exemption period. However, by end of March 2020, all taxpayers in this sector must try to file its annual tax return for 2019, and any tax amount payable paid can be on an installment basis every month until November 2020.

Similar to suspension of contract above for the manufacturing sector, the government shall provide 20% of the minimum wage for the year 2020 (i.e.  $190) to those employees affected by this suspension of employment or due to cessation of business operation for hotels, guesthouses, restaurants, and travel agents. To obtain this 20 % benefit the employees must attend a training course organized by the Ministry of Tourism.  The registered tourism business must verify and provide the details of their employees to the relevant ministry including, NSSF card numbers or certificates. During the period any contributions to insurance for occupational risk and health care scheme may not require.

4. Real Estate- Rental payments

The Government advised all institutions and private owners of commercial buildings and factories to avoid contract termination or eviction if the tenant fails to pay the rent during this period and also further encourages owners of commercial properties and factories to negotiate with their tenants on terms of the payments and to reduce the rental services.