Local SMEs await procedural details from tax authorities
Small and Medium Enterprises (SMEs) are still waiting for tax authorities to provide procedural details after the government announced tax incentives for SMEs in six priority sectors three months ago, said Federation of Associations for Small and Medium Enterprises of Cambodia (Fasmec) operations manager Ly Visal.
Speaking on Thursday, he said: “According to the General Department of Taxation [GDT], the detailed procedure for tax exemptions for the six priority sectors announced by the government will be completed by the end of January.
“After news of the tax exemption, many companies and businesses expressed their delight, but still look forward to seeing the [GDT’s] [application] procedure.”
According to the sub-decree on SME tax incentives signed by Prime Minister Hun Sen on October 2, six priority sectors, which include agro-industries as well as food production and processing will receive an exemption on income tax from three to five years.
The remaining four priority sectors are manufacturers of products used in waste processing and tourism, manufacturers of parts and equipment supplied to other manufacturers, research and development of information technology – including innovative equipment-management services and enterprises developing SME commercial districts.
The new sub-decree says that any SME intending to receive a five-year tax exemption must use at least 60 per cent domestic raw materials, increase the number of employees by at least 20 per cent or be located in SME districts.
Chen Sopheap, founder and managing director of Keiy Tambanh Khmer, which sells pha muong, seung and other traditional Khmer silk products, said she is currently not registered with the General Department of Taxation because there is insufficient legal documentation for taxation, though she notes that her company is ineligible due to its small number of staff and low income.
“I have not yet registered with the GDT, because doing so requires many standardised documents,” she said, adding that, “nowadays, I am also studying and preparing documents to prepare for registration”.
Currently, there are more than 500,000 SMEs in the Kingdom, though only 40,000 are registered, according to Fasmec president Te Taingpor.