Finance ministry lays out VAT exemptions on basic food items for 2022-2023 period
Finance ministry lays out VAT exemptions on basic food items for 2022-2023 period
Stakeholders are buoyant after the Ministry of Economy and Finance granted an extension of value-added tax (VAT) exemptions on a raft of basic food items for January 1, 2022-December 31, 2023.
The move will slash costs across the board and prop up local goods to compete in the market, they said.
In a January 11 statement, the ministry listed some of these items as fresh, salted, smoked or other processed meats including beef, pork, chicken, duck, goat, sheep and water buffalo; eggs; fish and seafood such as crayfish, shrimps and prawns, crabs and molluscs; sugars not in the form of candy; salts; and fish and soy sauces.
Sales by restaurants are not covered by the exemption, it said, noting that waived VAT amounts would be treated as “state charges”.
Chan Sitha, CEO of well-known fish sauce maker E Chei Ngov Heng Food Production of Kampot, told The Post that the extension would save consumers money and give local cottage industries a fighting chance against imports.
“Today, the cost of producing fish and soy sauces has increased, as raw materials become scarce and packaging boxes more expensive,” he said, explaining that imports tend to be cheaper and force local enterprises to mark down prices to stay in business.
“Thus, the VAT preferential treatment may help take the burden off of cottage industries to a certain extent, and undergird production of goods such as fish sauce,” Sitha said.
Cambodia Livestock Raisers Association (CLRA) director Srun Pov said the inclusion of meats in the extension would go far to alleviate cost issues for farmers and consumers.
He said the association lobbies the government every two years in December to extend the exemption, arguing that local farmers would otherwise face serious problems due to the high costs, which would also drive up market rates.
“This greatly helps out local livestock farmers, especially those who raise chickens, which have suffered a sharp decline in prices,” he said.
Cambodian Aquaculturist Association president Sok Raden told The Post that freshwater fish had at one point been excluded from the exemption, and hence subject to the 10 per cent VAT.
The latest extension means benefits, “not only for the breeders, but also for the consumers, especially during the Covid-19 crisis”, he said.
