Tax Cuts Promised For SMEs That Register With GDT

0
1779

In order to bring more businesses into the regulatory fold, the government has promised attractive new incentives for companies that register before December, including a two-year break on tax revenue.

Rice cracker products from Lyly, a local manufacturer. Supplied

Speaking at a forum on tech startups and micro, small and medium-sized enterprises yesterday, Cham Prasidh, the Minister of Industry and Handicraft, announced a host of incentives for MSMEs that register with the ministry in upcoming months, including training programmes for their employees and access to market research.

Cambodia now has over 510,000 MSMEs, but only 20,000 are registered with the Ministry of Industry and Handicrafts, which means more than 95 percent of businesses operate informally.

“Our strategy is to push them to register their businesses,” he said. “If they do, then we can help them in all aspects of running their companies.”

“If they do not register, we cannot support them as they are operating outside the law,” the minster said.

“We will support companies with tax incentives, as well as by sharing market information and coaching them in business strategies and the use of technology.”

Chan Narith, deputy director general of the General Department of Public Finance Policy at the Ministry of Economy and Finance, said they are working on a number of strategies and initiatives to boost performance in the MSME sector.

One of the measures on the table include allowing business owners to carry out the business registration and the taxpayer registration simultaneously in one portal, Mr Narith said.

The ministry is also considering partnering up with the private sector to offer training courses for skills in high demand.

“We will also establish a centre to support entrepreneurs, with the aim of raising their competitiveness,” he said.

The department is also considering giving a two-year exemption for tax revenue to companies that employ large numbers of people, purchase great quantities of raw materials or create value for the economy, as well as businesses that digitalise their accounting systems.

Bun Neary, deputy director general of General Department of Taxation, announced a two-year tax revenue exemption for businesses that register with the GDT before the end of the year.

“Enterprises are encouraged to register their business as soon as possible. If they register before December 31, we will give them a two-year tax revenue break, even if they have been operating for many years,” Ms Neary said.

She said the government has avoided increasing the tax burden on businesses, going as far as not imposing taxes on motorcyclists and abattoirs, and not charging VAT on utilities. She pointed out that people that earn less than $250 do not have to pay taxes on their salaries.

“This is all part of a new strategy to boost the sector and help businesses get off the ground.”

Eng Lykong, chairman of Cambodia Women Entrepreneur Association, which has more than 500 members, said she is now pushing member companies to register.

“About 30 percent of our members have not registered yet. We are helping them do it by providing guidance and facilitating the process,” she said.

The Ministry of Industry and Handicrafts aims to register 70 to 90 percent of MSMEs by 2023.

This article was originally published in the Khmer Times.