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Economy, tax incentives & labor conditions
The workers of the textile industry in Kampuchea earn, on average, between 70 and 80 dollars per month, overtime and premiums included/understood, an insufficient remuneration to live decently in this country.
The corporate tax rate is 20% on profits or 1% on turnover whichever is higher.
Where unions do exist, in the garment and footwear industries, as well as in the tourism and education sectors, it is difficult for them to negotiate with management on equal terms. Many of the garment workers are young women from rural areas. Employers do not hesitate to use anti-union discriminatory practices such as dismissals. Labour inspectors are poorly trained and, given their low pay, open to bribery. In cases where the Ministry of Labor decided in favour of workers, it rarely used its legal authority to penalise employers who did not follow its orders.
Only a small proportion (about one per cent) of the total labour force is unionised, and outside the garment and tourism/hospitality sectors, the trade union movement remains very weak. Most workers have little or no knowledge of trade unions, or of their labour rights. There was continuing credible evidence of management interference in factory-level trade unions.
Investments in Cambodia benefit from the following incentives: a corporate tax exemption of up to six years, which takes effect from the year the project derives its first profit or after three years of operation, whichever occurs first; or special depreciation equal to 40% of the capital cost of new and/or used tangible property used in manufacturing and processing by the project; 100% import-duty exemption on construction materials, production equipment, intermediate goods, raw materials and spare parts used by the export-oriented project; 100% exemption of export tax.
Minimum wage noted (US$/day)
2006 2.5 US$/day at/for Inditex (Industria de Diseno Textil)