Deputy Prime Minister and Minister of Economy and Finance Aun Porn Moniroth recently issued a government decree, officially extending the tax incentives for the agricultural sector until December 31, 2027. This move aims to address the recent pressure from falling rice prices due to disruptions in border trade and to promote sustainable development in agriculture.
Covering 13 major agricultural products, benefiting from multiple tax reductions
The current tax incentive policy covers 13 major agricultural products and related industries in Cambodia, including rice, corn, soybeans, pepper, cassava, cashews, rubber, longan, mangoes, aquatic products, poultry, livestock, and local palm oil used for producing animal feed.
Eligible enterprises engaged in the production, supply, and export of the aforementioned agricultural products can enjoy multiple tax benefits, including exemption from value-added tax, withholding tax, minimum tax, and advance profit tax.
Optimizing tax processes, reducing enterprise burden
This is one of the series of incentive measures implemented by the Cambodian government since 2019 to promote agricultural development and expand exports. To ensure the effective implementation of the policy, the government requires enterprises applying for incentives to complete registration with the General Department of Taxation (GDT) and strictly fulfill monthly and annual tax filing obligations.
It is worth noting that the General Department of Taxation in this policy also allows enterprises to include raw materials purchased from unregistered small farmers in their costs to offset profit tax, a provision that will effectively reduce the raw material procurement costs for agricultural enterprises and indirectly support the income of small farmers.
The pivotal role of agriculture is crucial, and the policy injects new momentum
Agriculture has always been an important pillar of Cambodia's national economy, with about 70% of the population residing in rural areas. However, the growth rate in this sector has been slow for a long time, with an annual growth rate of only about 1%.
Recently, the Cambodia-Thailand border conflict has led to the closure of some border crossings, preventing a large amount of rice from being exported to Thailand, further exacerbating the operational pressure on farmers. This tax incentive measure aims to effectively reduce the burden on agricultural enterprises, enhance market vitality, and inject new momentum for the sustainable development and export expansion of Cambodian agriculture.