Pen Bona Highlights Cambodia’s Low Tax Policy Amid Rapid Development

Pen Bona Highlights Cambodia’s Low Tax Policy Amid Rapid Development

PHNOM PENH, June 5, 2024 – Under the leadership of the Cambodian People’s Party, spearheaded first by former Prime Minister Hun Sen and now by Prime Minister Hun Manet, Cambodia has implemented highly favorable tax policies. These policies are particularly aimed at supporting low-income and impoverished individuals by minimizing their tax burdens.

The government has exempted family farmland from taxes, along with agricultural inputs, products, and real estate valued at less than 100 million riels (approximately $25,000). Additionally, there is no stamp duty charged on the transfer of property ownership valued at or below $70,000. Other tax reliefs include exemptions on stamp duties for inherited property transferred as a one-time gift, as well as on road taxes for motorcycles and tricycles. Salaries under 1.5 million riels are not subject to income tax, and small businesses with annual turnovers of less than 250 million riels are also exempt from tax.

Furthermore, the state has implemented supportive policies for disadvantaged businesses and continues to offer a range of tax concessions and exemptions.

Beyond tax relief, the Royal Government prioritizes the welfare of the poor and vulnerable, particularly evident during the COVID-19 pandemic when over $1.2 billion was allocated to assist those in need. Continuing efforts include six priority policy programs initiated by Hun Sen, which support healthcare, free education for poor children, and provide monthly assistance among other social benefits.

Despite recommendations from international financial institutions to increase tax revenue for development needs, the Cambodian government remains committed to its preferential tax policies, especially for the impoverished sectors. This approach has not hindered the nation’s progress; in fact, Cambodia is recognized by the United Nations as one of the fastest-growing countries globally. Transitioning from a post-conflict state to a lower-middle-income nation, Cambodia is on track to reach upper-middle-income status by 2030 and high-income status by 2050.

The country’s rapid development is visible in its modern infrastructure, including roads, bridges, schools, hospitals, high-rise buildings, and bustling markets, all reflective of significant peace-time achievements. This progress, coupled with some of the world’s lowest tax rates, underscores the effective leadership of Hun Sen and Hun Manet, fostering hope and prosperity in Cambodia.

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