Logo of Phnom Penh Post newspaper Phnom Penh Post - Tax-free brackets adjusted



Tax-free brackets adjusted

Content image - Phnom Penh Post
The government has decided that civil servants with low salaries do not have to pay income tax. Photo supplied

Tax-free brackets adjusted

The government has raised the tax-free bracket from 1.2 million riel (about $300) to 1.3 million (about $320) in a move to ensure civil servants due for raises this year are not subjected to income tax.

A sub-decree signed by Prime Minister Hun Sen earlier this month said all employees would have no obligation to pay tax if their salaries are below $320.

Last year, only those making under $300 were exempt from income tax.

The sub-decree also laid out all other tax brackets as follows – those earning $320 to $500 would be taxed at a rate of five per cent, $500-$2,000 (10 per cent), $2,000-$3,000 (15 per cent), and $3,000 and above at 20 per cent.

Ministry of Economy and Finance spokesman Meas Soksensan told The Post on Tuesday that the tax rate was revised by the government and the ministry in order to improve the living standards of citizens and civil servants.

He said many civil servants are due for small bumps in their salaries this year and it would not be fair to expose them to income tax.

The move, he said, was also agreed upon because the government surpassed its expectations in tax collection last year.

The government, therefore, decided civil servants with low salaries should not be subject to income tax, he said.

“This tax rate revision helps civil servants very much. If the government had raised their salaries and not revised the tax bracket, well then the raises would have been meaningless.

“For this reason, we revised the taxable stages by raising it a little to exempt civil servants from taxation,” he said.

Ministry of Civil Service spokesman Youk Bunna told The Post that all civil servants would receive pay raises this year.

He said that teachers will also see their salaries raised and will be able to keep the money now that the tax brackets have been adjusted.

“Overall, when the taxable rate is increased, the benefits will go to our officials. The education sector comprises of primary school teachers and lower-level teachers who earn salaries below the minimum,” he said.

Affiliated Network for Social Accountability executive director San Chey said many citizens will be exempt from tax because it is not only civil servants making meagre incomes.

“When we check the salaries that are subject to tax, it shows that many citizens are already below the taxable bracket. The new tax brackets are not likely to excite citizens,” he said.

Watch video:

MOST VIEWED

  • Kingdom accepts Chinese vaccine, PM first to get jab

    Prime Minister Hun Sen said China would offer Cambodia an immediate donation of one million doses of the Covid-19 vaccine produced by the Sinopharm company. In an audio message addressing the public on the night of January 15, he said Cambodia has accepted the offer and

  • Reeling in Cambodia’s real estate sector

    A new norm sets the scene but risks continue to play out in the background A cold wind sweeps through the streets of Boeung Trabek on an early January morning as buyers and traders engage in commerce under bright blue skies. From a distance, the

  • Hun Sen: Lakes filled in for national developments

    Prime Minister Hun Sen has announced continued operations to fill some lakes in Phnom Penh to create land for developments, though he is against the unrelated practice of damming rivers or blocking waterways. Speaking at the inauguration of the Ministry of Public Works and Transport

  • Koh Preus upgrades 70% complete

    Initial construction of a nearly $30 million tourism infrastructure project on Preah Sihanouk province’s Koh Preus Island is “about 70 per cent complete”, according to an official with the developer. Heng Thou, construction site manager of Angela Real Estate Co Ltd (ARE), told The Post that

  • Local media loses a giant, and The Post a great friend

    Cheang Sokha, a gifted and streetwise reporter who rose to the highest ranks of Cambodian media and was beloved for his sharp intelligence, world-class humour and endless generosity, died on Friday in his hometown of Phnom Penh. He was 42. His wife, Sok Sophorn, said he

  • Cambodia, India agree to start direct flights, tourism exchanges

    Cambodia and India have agreed to start direct flight connections and promote closer tourism exchanges and cooperation in all areas after the Covid-19 saga comes to a close. The agreement was reached during a meeting between Cambodian Minister of Tourism Thong Khon and newly-minted Indian