HE Finance Ministry has proposed new taxes on personal income, company profits,
construction licenses and land in a bid to broaden the tax revenue base of the
"This is part of the continued efforts to reform
the fiscal structure of Cambodia with the aim of increasing tax revenue," said a
ministry statement on May 1.
In particular, the measures are aimed at
broadening the revenue base, at present heavily dependent on customs duties,
particularly those levied on re-exports (imports which are re-exported to
neighboring countries), the statement said.
At present the country has no
income tax and the proposed new tax would apply to all workers who earn a
monthly salary in excess of $300.
A person earning between $300-$400 a
month would pay tax at 10 percent, rising to 15 percent for salaries between
$400-$4,000, 20 percent for $4,000-$8,000 and 30 percent for monthly salaries in
excess of $8,000.
A new company profits tax levied at a single rate of 20
percent will replace the current fee, which ranges from three to 40
The tax will affect all private businesses and public
enterprises registered under a controversial French-style national accounting
The old fee was applied to estimated profits, but the Finance
Ministry said businessmen rarely disclosed real profits and the state lacked the
capacity to cross-check returns.
"The proposal is thus to replace the
existing profits tax with one which, by taxing actual profits, is fairer and
The statement described the new company profits tax as
extremely competitive compared with neighboring countries such as Thailand where
the rate is 30 percent and Vietnam where the rate is 25 percent.
schedule is expected to be approved by parliament in the coming months, a senior
finance ministry official said earlier.
He said: "It's a routine task of
formalities which just has to be passed in the National Assembly before coming
A tax on construction licenses would be applied in the
biggest towns, including Phnom Penh, Siem Reap and Sihanoukville.
would be applied at a rate of three percent on the total value of the
construction project and the revenue raised would be spent on civic
beautification and restoration works, the statement said.
Also from June,
all import-export companies in Cambodia will be required to make an "advance
payment on the profits tax".
A tax on undeveloped land, designed to end
speculative deals and stabilize prices, would be applied at a rate of two
percent on the cost of purchasing the land in the first year rising to as high
as 10 percent in the fifth year.
The Finance Ministry will also tax
profits on land sales, for privately owned land a tax of between 10 and 30
percent would be applied to the profit earned at the time of resale.
land owned by commercial companies the tax rate would be 20 percent.
capital assets tax of two to three percent would apply to those owning more than
All contracts for the renting of land or houses would have
to be registered and a tax of one percent levied, the statement