GDT extends tax incentives for informal MSMEs’ voluntary registration for 2026

GDT extends tax incentives for informal MSMEs’ voluntary registration for 2026

Small enterprises that voluntarily register for tax will be entitled to exemptions from penalties and outstanding tax liabilities related to past non-compliance, including taxes, additional taxes, interest, and fines.

The General Department of Taxation (GDT) under the Ministry of Economy and Finance (MoEF) has decided to extend tax incentives and relief measures for informal (unregistered) micro, small, and medium enterprises (MSMEs) for voluntary registration.

The decision was announced in a letter signed by Kong Vibol, Minister Attached to the Prime Minister and Delegate of the Royal Government in charge as Director-General of the GDT, dated December 17 and released on Wednesday.

The letter was sent to Hem Vanndy, Minister of Industry, Science, Technology & Innovation (MISTI), also the Chairman of the Coordinating Committee for the Development of the Informal Economy, authorising the extension of the voluntary tax registration period with incentives until 2026.

“I want to inform that the Royal Government of Cambodia (RGC) has approved the extension of tax incentives for medium-sized enterprises under the informal economy development framework until 2026,” Vibol said in the letter.

He also confirmed that small enterprises will continue to benefit from a two-year patent tax exemption after tax registration, in line with the National Strategy on Informal Economic Development 2023-2028 and relevant legal regulations.

According to the letter, small enterprises that voluntarily register for tax during 2023-2028 will be entitled to exemptions from penalties and outstanding tax liabilities related to past non-compliance, including taxes, additional taxes, interest, and fines.

Further, they will also receive exemptions from tax registration service fees, information update fees, registration certificate printing fees, patent tax at the time of registration, and patent tax for two years following successful registration in 2024, 2025, or 2026.

Eligible small enterprises will benefit from income tax and minimum tax exemptions for two years, starting from the year the tax registration decision is granted and the following tax year.

For medium-sized enterprises that voluntarily register in 2024-2026, similar incentives apply. These include exemptions from penalties, fines, and tax liabilities related to past non-compliance prior to registration, patent tax at the time of registration, patent tax for two years after successful registration in 2024 or 2025 or 2026, as well as income tax and minimum tax exemptions for two years starting from the year of registration approval and the subsequent tax year.

According to the MISTI report released last week, Cambodia’s Digital Platform for Onboarding the Informal Economy has reached 251,085 registrations in one year after the Royal Government of Cambodia (RGC) officially launched the Digital Platform for Onboarding the Informal Economy on December 16, 2024.

The ministry added that those registered included 6,015 workers, 2,732 micro-enterprises, and 242,338 self-employed individuals. Of these registrations, 7 percent were completed through agencies, while 93 percent were self-registered.

It may be recalled that the Royal Government has decided to develop a national strategy on the development of the informal economy to promote the protection and strengthen the capacity, productivity and resilience of the informal economy.

khmertimeskh