The government has extended the fringe benefit tax exemption to several new industries, removing a 20-percent tax that employers were required to pay on the benefits offered to employees.
The fringe benefit tax applies to benefits that workers receive on top of their monthly salary, such as meals and transportation allotments.
“Now, for owners in all of the manufacturing sectors – including hotels, rubber plantations and all agricultural employers that provide additional benefits to employees – they will not be charged a tax [on these benefits],” he said. “It covers all employers and all sectors,” said Kong Vibol, Director of the General Department of Taxation (GDT).
Hiroshi Uematsu, CEO of Phnom Penh SEZ, praised the new move of the GDT, but also said that the imposition of the tax in the first place was ill-advised:
“This is positive for factories and their employees, as it was wrong to try to tax companies that wanted to provide extra benefits to their employees in the first place,” he said. He added that Cambodia was unique in the region for imposing this tax, and in removing it the Kingdom was becoming ‘normal’.”
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