PM vows to keep tax-free status for agricultural land

Photo by: TRACEY SHELTON
The prime minister said farmland won’t be taxed despite criticism over land disputes.

The Phnom Penh Post

Written by Sam Rith
Monday, 23 March 2009

PRIME Minister Hun Sen has reiterated a commitment to exempt farmland from taxes in an effort to boost the agricultural sector - one of the few areas that is withstanding the economic downturn.

"The CPP [Cambodia People's Party] has guaranteed that we will not take tax on farmers' rice or farmland," he said during the official opening of an irrigation system on Saturday in Pursat province.

He said he had resisted calls by foreign governments and NGOs since the 1990s to tax land holdings.
"I have told [foreign ambassadors] that I will not tax farmland," he said.

"I have responded that Cambodian farmers require not only tax-free land, but also irrigation systems and roads," he said.

He warned that land taxes could be implemented by other political parties.

"[Other political parties] promise to raise salaries, but to raise the money they have to collect land tax and other taxes," he added.

Opposition parliamentarian Son Chhay said the Sam Rainsy Party supported the exemptions. He pressed the government to strengthen land titles.

"The Sam Rainsy Party supports not only keeping land tax-free, but we also encourages the government to keep citizens from having their land grabbed," he said Sunday.

He added that the government has not issued legal documents showing that land belongs to citizens.

However, the opposition and NGOs have urged the government to tax large land holdings.

Son Chhay said the government could earn about US$27 million per year if it charged $10 per hectare from the 2.7 million hectares that the government offered in concessions to wealthy foreign companies.

"I am not aware of any country where people are allowed to own such large land holdings without paying tax," he said.

"I think the [government] should limit how many hectares of rice-farming land can be owned tax-free and increase taxes for landowners that have confiscated land and left it unplanted."

Kek Galabru, president of the NGO Licadho, also agreed with the government's stance on land taxes for small-scale farmers, but said she favours taxing large land holdings.

"I think we should not take tax from people who have only a few hectares. If there is a tax, it should be small and largely symbolic," she said.

"For companies or others who have hundreds of thousands of hectares of land ... we should tax them like other countries do."