Investors to Pay Land Tax

Cambodia introduces a new tax on companies that receive economic land concessions.
Email story
Comment on this story
Print story
A man cuts the bark of a rubber tree on a plantation in Ratanakiri province, Nov. 5, 2010.
A man cuts the bark of a rubber tree on a plantation in Ratanakiri province, Nov. 5, 2010.

Cambodia said Friday it will impose a new tax on investors who receive land from the government for agriculture development as a U.N. expert warned about the lack of transparency in allocation of land concessions that could hinder the country’s growth.

The Cambodian Council of Ministers adopted rules requiring companies granted long-term leases to develop agricultural plantations on state land—licenses known as economic land concessions— to pay a U.S. $5 per hectare tax beginning six years into their leases.

“Investment companies receiving economic land concessions must pay a tax of U.S. $5 per hectare to the government from their sixth year of investment," a statement issued by the council said.

The tax, which will increase by one percent each year, is aimed at improving agricultural production, it said.

Hundreds of domestic and foreign companies have been granted licenses to develop sugar, rubber, cassava, and other plantations through the economic land concessions, which have prompted a large number of land disputes across the country as villagers move to make way for the projects.

Agricultural and other land concessions are a key part of Cambodia’s plans to generate economic growth, but have generated growing unrest, with residents complaining they receive too little compensation or not having a voice in the process.

UN report

The new tax followed a report by the U.N.’s Rapporteur on Human Rights in Cambodia Surya Subedi warning that failure to manage land concessions more transparently could hurt the country’s economy.

In a report presented to the U.N. Human Rights Council this week, he called for better adherence to existing laws on the land concessions, warning that suspicions of corruption in their management could hurt growth.

“The granting and management of economic and other land concessions in Cambodia suffer from a lack of transparency and adherence to existing laws.”

“Businesses without proper legal and procedural safeguards run significant risks that could affect their reputations, legal status, and profits, and in turn could hamper Cambodia’s economic growth.”

By sparking suspicions of corruption, the lack of transparency could also fuel unrest among people affected by the land concessions, he said.

“Absence of transparency in such matters has bred suspicion of corruption at all levels of the government and has fueled resentment on the part of many Cambodian citizens,” he said in the report.

“Perhaps the greatest impact that the irregular granting and mismanagement of economic and other land concessions has on the country is to its stability.”

Human rights violations tied to land concessions were “well documented, serious, and widespread,” he said, and the country’s criminalization of land activists and human rights defenders “is particularly worrying.”

Land concessions granted to private developers have been at the root of several high-profile disputes in the Boeung Kak Lake and Borei Keila areas of Phnom Penh, where residents say they were forced from their homes.

Long-term moratorium

Growing public resentment against the country’s land policies prompted Prime Minister Hun Sen in May to declare a temporary ban on future land concessions.

Hun Sen vowed at Friday’s Council of Ministers session that the moratorium would remain in place as long as he is in office.

“Prime Minister Hun Sen has reaffirmed that the temporary suspension on granting economic land concessions will be maintained in the long term and will continue until Samdech [Hun Sen] retires from politics,” the council’s statement said, using one of Hun Sen’s titles.

Within weeks after issuing the subdecree in May suspending permission for further land concessions, Hun Sen gave approval to grant state-owned land to three private companies, flouting the ban.

The Ministry of Agriculture, Forestry and Fisheries says 1.19 million hectares (4,500 square miles) of land has been granted to hundreds of companies—including those from China, Vietnam, South Korea, Thailand, Malaysia, India, and Singapore—to invest in agro-industrial plantations.

But local rights watchdog Licadho puts the total number of economic land concessions higher, at two million hectares (7,800 square miles), amounting to over half of the country’s arable land.

Over 400,000 people have been affected by land concessions in 12 of Cambodia’s 24 provinces that Licadho surveyed, the group says.

Reported and translated by Samean Yun for RFA’s Khmer service. Written in English by Rachel Vandenbrink.





More Listening Options

View Full Site