Logo of Phnom Penh Post newspaper Phnom Penh Post - SMEs bemoan government tax exemption requirements

SMEs bemoan government tax exemption requirements

Content image - Phnom Penh Post
A worker prepares snacks at the Ly Ly Food Industry Company factory in Phnom Penh. Fasmec president Te Taingpor says most SMEs cannot meet the government’s requirements for tax exemptions. Post Staff

SMEs bemoan government tax exemption requirements

Small and medium enterprises (SMEs) are finding it difficult to meet the requirements to apply for tax exemption from the General Department of Taxation ’s (GDT) said Federation of Association for Small and Medium Enterprises of Cambodia (Fasmec) president Te Taingpor.

Speaking to The Post on Wednesday, he said most SMEs could not meet the requirements as they were still too high.

“I don’t think our SME members will apply for it. It is difficult and complicated, and the capacity of our SMEs is too limited to meet the required criteria,” he said.

The GDT announced in December that all SMEs must have legal certification demonstrating their business statuses and must submit business, financial and employee plans as well as commercial and labour agreements and their business locations to apply for tax exemption.

Taingpor said even submitting business and financial plans are difficult for SMEs, and hence, Fasmec is now working on a project to ask the government to facilitate the procedures for the SMEs.

“We are trying to find a better way for all our SME members and will submit our proposal to the government to encourage them to apply for tax exemption,” he said.

A sub-decree on SME signed by Prime Minister Hun Sen in October offers income tax exemption from three to five year to six priority sectors, including agro-industries and food production and processing.

The new sub-decree said SMEs intending to receive a five-year tax exemption must use at least 60 per cent domestic raw materials, increase the number of employees by at least 20 per cent or be located in SME districts.

Cambodia Women Entrepreneurs Association president Eng Lykuong said the requirements would be beneficial in the long term despite how strenuous they may currently be for SMEs.

“It is hard and puts a lot of pressure on SMEs to meet the criteria, but if we overcome this, it would be fruitful in the long run for both SMEs and the government,” she said.

“We need time to educate SMEs to understand the benefits. The government should provide short courses to promote awareness of the procedures.”

MOST VIEWED

  • Virus tops 84 with new cases in S’ville

    The Ministry of Health on Sunday night confirmed another 31 cases of coronavirus infections, bringing the Kingdom’s total to 84 and it highest daily tally. There have been no fatalities thus far. The latest cases were found in 29 French tourists and their two Cambodian tour guides

  • Kingdom’s virus toll tops 84, Cambodians in Thailand rush home

    The Ministry of Health on Sunday night confirmed another 31 cases of coronavirus infections, bringing the Kingdom’s total to 84 and its highest daily tally. There have been no fatalities thus far. The latest cases were found in 29 French tourists and their two Cambodian tour guides

  • NBC calls for cashless payments

    The National Bank of Cambodia (NBC) has urged government ministries, financial institutions and the public to conduct cashless payments via electronic systems where possible to combat the spread of Covid-19. “To contribute to the prevention of Covid-19, the National Bank of Cambodia encourages financial institutions

  • Mysterious century-old structure found at bottom of Angkor pond

    The Apsara National Authority (ANA) has discovered a mysterious 1,000-year-old structure of a wooden building at the bottom of a pond after the Angkor Wat temple’s conservation team completed restoring its northern cave. The deputy director at ANA’s Angkor International Research and Documentation

  • CEO held for fraud in Siem Reap

    Over 200 individuals gathered in front of the Siem Reap Provincial Court last week to ask that Dim Suonnath, the CEO of a real estate company being held for fraud, take responsibility for compensating some 2,000 residents who invested with him. The request was denied. Suonnath responded

  • Ministry calls for home schooling

    Minister of Education, Youth and Sport, Hang Chuon Naron appealed to parents of students to provide home education in a proper environment and help them obtain more learning materials. The ministry also allowed schools to take a premature vacation after several people tested positive for