Cambodia Issues Tenth Round of Stimulus Measures

On October 28, 2021, Cambodia issued its tenth round of stimulus measures to help specific industries mitigate the economic impact caused by the ongoing pandemic. These latest measures are an extension of the support provided in the ninth stimulus package, which was issued in June 2021.

Businesses in the garment, textile, footwear, and tourism sectors will continue to receive wage subsidies and tax exemptions until December 2021. Cambodia’s garment and textiles industries contribute to more than 30 percent of GDP and employ over 800,000 workers nationwide.

Meanwhile, the tourism industry contributes 12 percent of GDP and the government views this industry as an indispensable path towards economic recovery. As such, the government also plans to attract seven million tourists by 2025 and 11 million domestic tourists by 2023.

Extended support for workers

Suspended workers from the garment, textile, and footwear sectors will continue to receive the standard US$40 per month until the end of December 2021. Moreover, an additional US$30 per month contributed by their employers (thus totaling US$70 per month) will also continue.

Suspended workers of hotels, guest houses, restaurants, and tourism workers will be eligible to receive US$40 per month, also until the end of December 2021.

Employees and workers from the mentioned sectors must be registered with the Department of Labor and Vocational Training (DLVT), the Ministry of Commerce (MoC), the General Department of Taxation of Cambodia (GDT), and the Ministry of Tourism (MoT).

Continued monthly tax exemptions

Hotels, guesthouses, travel agencies, and restaurants will continue to be exempt from paying monthly tax until the end of December 2021. These businesses must be registered with the GDT and be located in Siem Reap, Phnom Penh, Preah Sihanouk, Kep, Kampot, Bavet, and Poi Pet. Businesses, however, must continue to submit their tax returns via the E-VAT system every month during this exemption period.

In addition, the government has suspended the mandatory monthly payments to the National Security Fund (NSSF) for the schemes related to occupational risk and healthcare, until December 2021.  In March 2021, Cambodia issued Sub-Decree 22 which finally implements the Social Security Scheme (pension scheme) after being delayed since its approval in 2019.

There are four pension schemes available in Cambodia:

• Old-age pension;
• Disability pension;
• Survivor’s pension; and
• Funeral allowance.

Further support for the aviation industry

Airlines in Cambodia are still exempt from paying the ‘minimum tax’ until the end of December 2021. The minimum tax due is equal to one percent of total turnover, except value-added tax (VAT), and is irrespective of whether the taxpayer is in a profit or loss situation.

Moreover, airlines can defer the payment of aviation fees for the same period.

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