Another tax incentive to entice companies to CSX
Another tax incentive to entice companies to CSX
In a bid to encourage companies to list on Cambodia’s beleaguered stock exchange, a new prakas released today will allow businesses to delay their monthly prepayment of tax on profit to the end of the year, according to an announcement on the Cambodia Securities Exchange.
The prakas was released to complement an earlier directive giving listed companies a 50 per cent tax break for three year.
Firms that qualify with the Securities and Exchange Commission of Cambodia will immediately enjoy the delay in prepayment of tax.
“Without this prakas, the previous anukret [directive] is limited in providing incentive to those companies,” said Soleil Lamun, director of market operations at the Cambodia Securities Exchange (CSX).
He added that this was to also help companies that made a loss or little profit, so that they didn’t have to make these tax payments upfront.
Currently, companies pay a monthly prepayment of tax on profit, which is charged at one per cent on their monthly turnover.
With the new prakas, companies will not make this payment monthly, instead it will be calculated at the end of the financial year.
The prakas goes on to say that companies will have to inform the tax department to receive this benefit, only after getting approval from the SECC and that if any irregularities are found by the time of tax filing the incentive will be revoked.
In addition to these incentives, the CSX has tried to lure traders by providing two new tools – “continuous trading”, which allows investors to buy or sell securities immediately without having to wait for the execution times and “trading before settlement” which enables investors to use securities or cash to be received from one purchase to make another trade immediately.
The CSX also plans to launch a “small board”, which will be designed for small and medium enterprises and will reduce the cost and pre-listing requirements for these companies.
“For the small and medium companies, they can also list and as you know there are many SMEs and the SECC are working on this new regulation,” said Sok Chamrouen, vice general manager at Phnom Penh Securities.
According to Chamrouen, the regulatory framework for the new small board could be announced by the SECC in the next two or three months.
There are currently just two listed companies on the CSX. Taiwanese garment manufacturer Grand Twins International had its IPO in June 2014, joining the state-owned Phnom Penh Water Supply Authority, who joined in the bourse in April 2012.
The Phnom Penh Special Economic Zone, Cambodia’s most developed industrial park, is aiming to go public later this year.
