Selected Comments Samdech Techo Hun Sen,​ Off-the-Cuff Elaborations and Statement at the Cabinet Meeting on Tax, Salary, Waste/Trash Collections and Management, and Waste-to-Energy Plants [Unofficial Translation]

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CNV:

Today, I have the necessity to deliver this statement to the Cabinet, provinces, armed forces as well as the people in the whole country in the presence of media here and is in live broadcast. Prior to the Cabinet’s discussion on public financial management draft for 2020, I am taking this opportune moment to […] share with our compatriots two major and unchanged points in policies delivered and led by the CPP-led Royal Government.

Firstly, continue to impose no tax on agricultural land. As long as the Cambodian People’s Party continues to rule in the Royal Government, the Party will not impose tax on rice field and agricultural farmlands of the people.

Secondly, uplifting the tax ceiling above minimum salary level. It is not time for us to readjust the ceiling at which tax shall be levying on minimum salary. We have done this since the fifth legislative term Royal Government aimed at helping improve living condition of civil servants, teachers, medical staff, police and soldiers, as well as workers and employees.

The Royal Government has been making efforts regularly to focus attention on increasing minimum salary and wages while guaranteeing that increases are not subjects to income tax obligation. In reality, we have adjusted minimum salary obliged to pay income tax three times already through the public financial management law. Firstly, in 2015, we have moved the ceiling up from minimum salary of 500,000 Riel to 800,000 Riel. Secondly, we moved the minimum salary obliged to pay tax from 800,000 Riel to one million Riel. Thirdly, the minimum salary level readjusted to 1.2 million Riel.

Along with increases of minimum salary and wages, to ameliorate living standard of civil servants, teachers, medical staff, workers and employees with children and spouse in their burdens, the Royal Government decided to set tax on their salaries in 2017 from 75,000 riel/month to 150,000 riel/month or two folds. The readjustment reduces the taxing base on salary to allow exemption of income taxes.

The Royal Government also provide more tax favors on additional advantages and do not include in taxing base on salary on subsidy that workers/employees received for travel, food, pregnancy allowances, ending-contract remuneration, or payment for end of service […] on which at a certain level, other country would impose taxes.

For 2020, starting from April, minimum monthly salaries for civil servant will reach 1,172,500 Riel, for teachers and medical staff 1,272,500 riel, for police forces (sergeant) 1,256,977 Riel, and for soldiers (sergeant) 1,181,977 including rice or 1,23,500 including no rice. These minimum salaries would reach the income tax ceiling according to the new Article 47(2) of fiscal policy. In this development, the Royal Government has had the necessity to make amendment to the new Article 47(2) aimed at lifting the income tax ceiling by incorporating it into the public financial management bill for 2020 […] and will continue to do so along with increase of minimum salary and wages in the following years.

In order for amendment to take place in a flexible and timely manner in conformity with socio-economic development, I have instructed the Ministry of Economy and Finance to get the amendment bill ready on the new Article 47(2) of the fiscal policy, which do not bring to sight monthly taxed salary and tax rates by class as before. The bill has opened way for the Royal Government to decide by sub-decree on salary subjected to tax and tax rates proposed by the Ministry of Economy and Finance. Projected tax ceiling for minimum salary has gone up from 1.2 million Riel to 1.3 million Riel for 2020 […]

I am reaffirming that the Royal Government led by the Cambodian People’s Party will continue to work on tax ceiling to allow minimum salary to enjoy tax exemption along with policy to levy no tax on household agricultural land set out and implement ever since the beginning through to the present […]

[Start of Elaboration – 1]

In this meaning, let me clarify that the minimum salary for teachers now has reached about 300 USD per month. Even the minimum salary will reach 1,000 USD/month we will continue to work on tax favor for them. I mean, those with basic minimum salary will not face with income tax […] a subject matter relating with salary adjustment in the public financial management bill in 2020.

[End of Elaboration – 1]

I still have the need to talk about waste collection and electric bill that I already had the public attention this week. Stemming from difficulties faced by people in Phnom Penh and those who come from provinces to stay in Phnom Penh with regard to waste collection mandate of CINTRI as well as our determination to improve public service, the Royal Government of Cambodia of this legislative term, I have decided on 22 October 2019 to:

Firstly, work towards stripping rights from CINTRI from being the sole company to collect waste/trash since, from the day it entered into contract with the Royal Government, the company failed to implement obligation expected in face of growth of Phnom Penh and demand of the people. Stripped of the rights, CINTRI will receive appropriate and fair compensations. Current physical and human resources of the company will come under provisional supervision and management of an autonomous unit to guarantee sustainability of waste collection for the people of Phnom Penh.

[Start of Elaboration – 2]

Let me clarify this point. We cannot keep talking about CINTRI (failing to do and/or to do that) endlessly […] I have no other choices and I cannot allow it to go on and on. I have in the past made decision to allocate four areas for wastes to gather. However, in nearly one full year, there has not seem to be a place chosen. It is necessary therefore for the company to end its service and transfer temporarily its means to the state entity. We must take action as matter of urgency to ensure control and management of human resource (in the company) to respond to people’s demand in this task.

[End of Elaboration – 2]

Once the autonomous unit stabilizes the job, the Royal Government will allow for auction in transparent competition to choose at least four companies to carry out the job of collecting waste/trash in the city with quality and quantity acceptable to people’s demand. The Royal Government expects the new mechanism will also create more jobs for our people.

[Start of Elaboration – 3]

On this point, let me assert that we will assume management of the whole company and once it achieves stable function, we will bring in our plan to have four divisions (of waste collections). One company would not be able to the job of (collecting wastes) in Phnom Penh, which was before only 300 square Kilometers. As of now, Phnom Penh has enlarged in size to over 600 square Kilometers – larger than Prague, Budapest or Sofia in that matter […] CINTRI alone would not be able to carry out the task. We must allow companies to bid for the job, while CINTRI also can join auctioning for right only that it cannot bid for the task alone. We may have more number of workers. The move will also contribute to job creation for non-registered workers. We can also allow job sub-contractions, where those who work more will earn more and work less will earn less […]

Removing Waste Collection Charge from Electric Bill

On another front, we must take it seriously. It is about removing charge of waste collections from the electric bill of the Electricite du Cambodge from 1 January 2020. We will replace it with a new mechanism. This would not only respond to people’s aspiration but also be necessary to allow waste collection charge blocking progress in reform on electricity front, while it has reduced price of electricity gradually. My decision on 22 October 2019 is in fact a surgery into a protracted disease that I have order to resolve through the decision letter issued on 10 February 2015, and relevant stakeholders failed to implement it.

In 2015, I may remind, there had been decision in principle to remove waste collection charge from the electric bill. I have waited for four years and it never happens. I do not leave it for discussion anymore […] four years is a long time. You may ask people in Phnom Penh and count how many would say charging for waste collection printed in electric bill was not the right thing to do. I know that business people and even diplomats have protested about why the charge for waste collection enclosed in the electric bill.

The unjust point has been that some people never have waste collected from their houses but they have to pay for the service too (because the charge attached in the electric bill). More so, people could not see how low has the electric price gone because while the amount still includes waste collection […] let me stress that the same will apply to provinces where similar practice is observed. I am calling on HE Keo Ratanak (of Electricite du Cambodge to work on this decision) that provinces where charge of waste collection is included in the electric bill will see that it removed […]

Some have commented in social media why we have to wait until 1 January 2020, let me take this chance to inform you that it is not an easy matter. We must leave ample time to organize mechanism waste collection charge or we may face with turmoil because of disruption in management. From today through to 31 December 2020, people will pay for electric bill attached with waste collection charge. From 1 January 2020, we will implement new payment mechanism. I have seen draft of new bill form but I have not yet disclose it in public […] 

[End of Elaboration – 3]

I have delegated task to Deputy Prime Minister and Minister of Economy and Finance HE Aun Pornmoniroth to lead a coordinating meeting with related parties to realize the above goals of organizing mechanisms for waste collection management and for waste collection charge, as well as matters concerned. I task the Ministry of Mines and Energy to conduct study to set required conditions for bidding by private sector partners to build and operate waste-to-energy plants to combust waste to produce electricity while prohibiting import of waste from foreign countries. This is one of the measures to take to ensure our country is clean and people live in better environment.

[Start of Elaboration 4]

There have been many companies expressing interests in (waste-to-energy) projects but there has been hesitation about costs. As I said earlier, we would try to find a way to reach acceptable operating costs. We could step into taking profit earned from electricity to help cover as subsidiary payments to sustain waste collection for the sake of improving our environment. We must prevent our country from having wastes buried everywhere in the future. One thing we must prohibit is any waste-to-energy investment projects must not entail “importing wastes from other countries” to meet requirement. Cambodia must not be a dumping ground of waste or a storage of other countries’ wastes to combust for electricity.

Continued Reinvestment of Five-Year Dividend on Electricity Transmission Lines

In another development, I have decided to expedite plan to provide electricity from national gridlines to every villages. Through fundamental reforms in energy front, over the past ten years, 92% of the 14,168 villages in the whole country have access to affordable electric price from national transmission lines. To speed things up, I decided on 22 October 2019 for the Royal Government to continue to take out no dividend from profit made by the Electricite du Cambodge for another five years 2020 through to 2025. It is another form of state investment to expand access to national transmission lines for the remaining areas. We have seen that decision to take no dividend from profit made by Electricite du Cambodge for the first five years fruitfully contributed to augment its investment fund to expand electric transmission lines to people in rural areas.

We have been “using electricity to expand its service coverage areas.” We did not take dividend from electricity and put it in national budget. However, Electricite du Cambodge is obliged to observe taxes and other matters concerned. With dividend reinvested, we have brought the national electric lines to 92% of villages in the country. I have decided to continue it for another five years to ensure that electricity from national lines reaches every village. That would help ensure roughly similar prices people will pay for cost of electricity used since people in the remaining 8% of villages still pay high price to private electric supplier. This is what I wish to set light on efforts made for expedition for people to benefit from reforms […]

Let me finish my statement here. I hope that people will carefully learn my message. Tonight TV stations may broadcast this after we have live coverage now on Fresh News and social media […] it is about the right time to resolve problems concerning waste collection and management. We must double our efforts to work on the issues as matter of urgency to make sure our people will benefit from reforms. The media may leave now […]./.

[End of Elaboration 4]