Hotels, guesthouses, restaurants and travel agencies in the capital and a handful of other localities that are registered with the General Department of Taxation (GDT) will be exempt from taxes for the six months to June 30, in a bid to boost business activity in the tourism industry.
The localities are Banteay Meanchey province’s Poipet town and Svay Rieng province’s Bavet town, as well as the coastal provinces of Preah Sihanouk, Kep and Kampot, the GDT noted in a statement on February 1.
The GDT listed some of the types of exempted tax as value-added tax (VAT), income tax, payroll tax, additional benefit tax, withholding tax, special taxes on certain goods and services, public lighting tax, and lodging tax.
The government will also provide tax exemptions for the real estate and aviation sectors over the six-month period, as part of its strategic frameworks and programmes to restore and prop up economic growth in Cambodia, the statement said.
Cambodia Association of Travel Agents (CATA) president Chhay Sivlin told The Post on February 2 that the government’s continued tax exemption would be a valuable lifeline for the tourism sector, especially hotels, guesthouses and restaurants, which have been riding out the Covid-19 storm with limited revenues.
The move will encourage owners of tourism-oriented businesses to stick to their guns and persevere, she said, highlighting Siem Reap business’ dire need for funds to start back up again as the Kingdom rolls back more pandemic-linked restrictions for fully vaccinated travellers.
“It would be fantastic if the government were to grant these exemptions until the end of the year. Although we’ve reopened the country, the new Omicron variant continues to burden us, leading some countries to impose restrictions.
“Hence tourism inflows remain subdued by barriers. Although we have resumed flights, they are still limited,” Sivlin said.
Kan Chansatya, general manager of Lynnaya Urban River Resort and Spa, stressed that the Covid-19 crisis had hit the hotel business hard.
These tax breaks can help alleviate the hotel’s suffering to some extent, he said, noting that despite a marked shortage of guests, operating expenses remain virtually the same, including water, electricity and staff-related costs.
“Although lots of local tourists go on trips, their spending is still limited, unlike foreign holidaymakers,” he lamented.
“We can only expect to see bookings from international guests once more flights resume.”