Tax break to boost domestic cement industry
Tax break to boost domestic cement industry
The Royal Government has announced a two-year exemption for the domestic cement industry from a 5 percent Special Tax.
At the same time, the government urged producers to meet their obligations to train local staff and transfer technical skills to improve the skill base of workers in the industry.
The exemption applies from the beginning of this year through to the end of 2026, the Ministry of Economy and Finance (MEF) said in announcing the move last week.
“This exemption is intended to bolster the growth of the local cement sector,” said Minister of Economy and Finance Aun Pornmoniroth.
The government’s proactive approach underscores its commitment to fostering a thriving cement sector as part of Cambodia’s broader economic development strategy.
Prime Minister Hun Manet said during a meeting with officials from the Cambodian Cement Manufacturing Association (CCMA) last month that investment in Cambodia’s cement industry had topped $1.2 billion, significantly boosting the economy and creating more than 2,700 jobs.
In addition to the tax break, the MEF is also working with the Ministry of Mines and Energy to explore additional measures to enhance competitiveness and promote the continued growth of the cement industry.
Demand for cement has been driven by Cambodia’s booming construction industry, which is set to surge 7.3 percent a year from 2026-2028, fuelled by massive government spending on major infrastructure projects.
That compares with an estimated 5.8 percent for the sector last year and a forecast of 6.8 percent in 2025.
And the projected growth in the construction sector is well ahead of the forecast 6.3 percent growth in GDP in 2025.
Locally produced cement now dominates construction projects across the country, a significant shift from a decade ago when imports met most of the demand.
“Currently, domestic cement production meets 80 percent of the nation’s annual requirements, with output expected to increase further in 2025,” CCMA secretary-general Puth Chandarith told Khmer Times after the group meeting with Mr Hun Manet last month.
The CCMA reported that the country produced 7.4 million tonnes of cement from January to November last year, reflecting an approximate 10 percent rise over the 6.7 million tonnes in the same period a year earlier.
