A major Hong Kong investor in Cambodia has claimed that a government duty on seafood exports is stunting the country’s fish processing industry.
Hong Kong-based Sunwah Group began operating a shrimp-processing factory in Sihanoukville in 1994, and its plans in the country now include building a $400 million skyscraper in central Phnom Penh.
In a press briefing on Tuesday, the group’s chairman, Jonathan Choi, said that a levy of 10 percent on exporting seafood had prevented the company from growing its operation here, and was a major factor in Cambodia’s seafood industry’s small size.
“If you charge 10 percent export tax, then the product here is not competitive,” he said.
“The fisherman is very clever: If you discount 10 percent because of the tax you pay your government, then they will sell to Thailand, they will sell to Vietnam [which do not levy export taxes on seafood].”
Mr. Choi said that he had seen Cambodian fishing boats selling their catches to Vietnamese ports, where they can get a better price.
He said that Sunwah, which also owns seafood processing factories in Thailand and Vietnam and plans to build a high-end real estate development on a plot of land next to NagaWorld casino, had reduced its staff at its Cambodian factory from several hundred to fewer than 100, who work seasonally due to a lack of raw materials to process.
“Our factory in Sihanoukville port for 20 years cannot work. [It produces] only small quantities,” he said.
Mr. Choi said he had communicated the idea to Cambodian government ministers.
“I tell them that ‘If you want to build your industry, you should encourage exports, rather than penalize the export,’” he said.
Sok Sovithyea, deputy chief of the public relations unit at the General Department of Customs, said the 10 percent duty was imposed on certain products, such as seafood, which are considered natural resources.
“The 10 percent tax is for non-processed fish. For processed fish, the tax is lower,” he said, adding that the government would listen to such complaints made by companies.
Sunwah insists, however, that although it processes shrimp and exports them frozen to Hong Kong, it is still charged a 10 percent levy.
According to figures from the Ministry of Commerce, Cambodia exported more than 1,600 tons of fish and seafood products in 2012, valued at less than $3.5 million. According to figures from the U.N. Food and Agriculture Organization, Thailand’s seafood exports are worth about $6.5 billion a year and Vietnam’s are worth about $4.5 billion.