The new Law on Taxation may be promulgated as soon as “in the next two or three months”, replacing the 1997 original, aiming to bring the Cambodian tax regime more in line with current and anticipated international standards and economic environment, as well as to attract more investment to the Kingdom.
General Department of Taxation (GDT) chief Kong Vibol told a public forum last week that, “as committed to by Deputy Prime Minister and Minister of Economy and Finance Aun Pornmoniroth, the law may take effect before the inauguration of the seventh legislature, or maybe even in the next two or three months”.
Although no official date has been set for the inauguration of the seventh legislature, the third through sixth were all inaugurated in September.
Vibol recounted that the law had been shaped over the years though the guidance of the Ministry of Justice, additional government agencies, and other institutions.
After reaching an agreement with the justice ministry, the Ministry of Economy and Finance forwarded the draft law to the Council of Ministers for review, he said, adding that upon approval, the document would be submitted to the National Assembly.
Royal Academy of Cambodia economics researcher Ky Sereyvath told The Post on March 15 that the new law is tailored to the realities of Cambodia against the backdrop of the regional and global economies, and in particular, features tax-related incentives designed to attract more investment flows as well as boost domestic production and exports.
“Our economy is growing year after year, and it is a plus point that the government is constantly amending laws and drafting new ones to address certain aspects or changes in the economy, through tax incentives and other support, aiming to inspire confidence among investors and attract new investment into our country,” he said.
In a previous interview with The Post, American Chamber of Commerce in Cambodia (AmCham) president Anthony Galliano commented that Vibol intends to synchronise the taxation law with the Law on Investment that was promulgated on October 15, 2021.
This, he said, “will provide certainty and transparency for foreign investors determining the most attractive investment destinations”.
“There also needs to be recourse at the GDT’s disposal for those that not only evade tax, but may be involved in criminal activities. Having laws on the books to deter criminal enterprises strengthens compliance and allows the GDT to take punitive measures as appropriate,” he added.
Galliano shared that AmCham encourages foreign investment in the Kingdom and has coined the mantra: “Invest Cambodia, the Asian Tiger of the 21st Century”.
The GDT said that it collected $3.45511 billion in revenues last year, exceeding the $2.81955 billion annual target by 22.54 per cent and marking a 24.20 per cent jump over the total that it had reported for 2021. The 2023 target has been increased by 26.68 per cent to $3.57170 billion, which is just 3.37 per cent more than the amount collected in 2022.
Annual GDT revenue targets are set by the Law on Financial Management for the corresponding year.