Taxes Raised on Sand for Export, Despite Export Ban

Despite a longstanding ban on sand dredging for export, the government issued a proclamation last month that triples the royalty paid on exported dredged sand.

According to the Nov 8 proclamation, which was issued by the Ministry of Finance and the Ministry of Industry and signed by their respective ministers, the royalty was raised from $0.20 to $0.60 per cubic meter of sand.

“[Officials from the Ministries of Finance and Industry] have to directly inspect the site of production, the business, and the transport equipment of construction sand and dirt sand for export overseas in order to calculate the amount of royalty fees needed to be paid into the state budget,” the proclamation reads.

Citing the potential of serious damage to the environment, Prime Minister Hun Sen last year announced a moratorium on all coastal and riverine sand dredging as well as overseas sand exports until an industry-wide review could take place.

Chan Yuttha, Cabinet director at the Ministry of Water Resources, confirmed yesterday that the ban on sand exports was still in place and said he did not fully understand the proclamation.

However, he said that dredging in the sea is now permitted, although there are currently no active dredging operations in Cambodian waters because the “dirt sand” the sea yields is not as lucrative as freshwater “construction sand.”

“The ban is still in place on freshwater sand, but in the sea it is allowed,” he said. “Maybe they are referring to sea sand dredging, where the operations are stopped because there is no market.”

Khim Dara, deputy director of the Sand Resource Company, which exported sand to Singapore before the moratorium, said he did not understand why the government raised the sand royalty when the export ban was still in place.

Mr Dara said that in addition to these royalties, which are collected by relevant government ministries and disbursed into the national treasury, sand exporters must also pay a separate export tax of $0.45 per cubic meter.

The price of sand now stands at $1.60 per cubic meter.

A report released in May by environmental watchdog Global Witness accused the government of allowing politically connected businessmen to continue dredging and exporting construction sand to countries like Singapore.

Officials from the Ministries of Finance and Industry could not be reached for comment yesterday.

 

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