Manet urges support for regulatory compliance

Manet urges support for regulatory compliance

Prime Minister Hun Manet reiterated that his government will support the private sector and that regulatory compliance is not a cat-and-mouse game, where the authorities wait for private sector entities to make a mistake.

While addressing the May 9 official launch of the Cambodia Confederation of Investors Association (CCIA), Manet said the government will support all private companies doing business in Cambodia, and called for more investment from local and overseas firms. 

However, he wanted to see close cooperation between the two sectors with respect to compliance.

“Strengthening compliance means following principles, plans, procedures, laws, regulations and contracts. What are the benefits of strengthening compliance? Enhancing compliance will improve order and transparency, creating a clearer and easier business environment,” he said. 

“It builds trust between the state and the private sector and creates a stable environment to do business,” he added.

He acknowledged that some companies find compliance sensitive. He suggested that companies should not compare it to cats hunting mice, because the government is not waiting to pounce on any mistakes that private entities may make.

“The state has the role of supporting the private sector, not just issuing fines. I do not want people to have the perception that the state is just waiting to catch companies out. We do not want to play such a role. I want all of us to see our partnership as a form of solidarity that allows us to think, do and implement altogether,” he said.

Manet would like to see a situation in which the private sector and the state work together to make Cambodia a place where foreigners want to invest. He said the government is committed to making it easier for investors in the Kingdom to be competitive and successful.

Chan Sophal, director of the Centre for Policy Studies, believed that compliance may not be enforced evenly across the private sector, or strongly enough at all companies. This could be the result of overly strict compliance requirements.

He said it was important that companies compete with each other on the same terms.

“Unfortunately, companies that are fully compliant face high taxes that make it difficult to keep the costs of goods or services as low as those of non or partially-compliant companies,” he explained.

“I think a realistic way of ensuring that all businesses are compliant and can compete on a level playing field may be to lower tax rates. Later, the rates can be gradually increased,” he added.

Kaing Monica, deputy secretary-general at the Textile, Apparel, Footwear & Travel Goods Association in Cambodia (TAFTAC), explained that there are many different areas of compliance – labour, environment, tax, building safety and so on, and each has different challenges.

“The private sector is working according to the principle of continuous improvement toward full compliance,” he said.

Lim Heng, vice-president of the Cambodia Chamber of Commerce (CCC), told The Post that the government wants all private sector and government institutions to respect and enforce the laws equally and with transparency, in order to eliminate any irregularities or unnecessary bureaucracy. 

“The private sector wants equal competition based on compliance requirements, in which no one can evade the law. For example, when paying taxes on imports and exports, we must follow the principles of compliance principles,” he said.

“We must avoid a situation where some people pay full taxes and others do not. This is a problem that we must all resolve together,” he added.

He noted that enforcing compliance will contribute to the Kingdom’s economic growth and increase the national budget.(phnompenhpost)

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