Thailand
Cambodia: Value-added tax on food items exempted for two years
In a major relief to a large section of people, the Ministry of Economy and Finance announced the exemption of value-added tax or VAT on basic food items for two years starting from 2022. The ministry in a statement issued on January 11 said that the VAT exemption is for two years starting from January 2022 until December 2023.
“The Prakas (announcement) applies to self-declared taxpayers who work locally to supply basic food items for the people of the Kingdom of Cambodia,” the ministry noted. Basic food items refer to some items that are necessary for daily life such as beef, goat, sheep, pork, chicken, duck, eggs, freshwater and marine fish whether fresh or processed, sugar, salt and soy.
“Defined as state VAT expenditure on the local supplies of basic food items,” the ministry underlined, adding that this shall not be applied to the food items supplied by restaurants.
The self-declaration regime is the only tax regime in Cambodia. Under the self-declaration regime, taxpayers are classified into three categories (e,g. large, medium and small taxpayers) based on their sectoral turnover, legal form and other criteria.
Economic researcher and lecturer Ky Sereyvath told Khmer Times on Wednesday that this will make the price of locally produced food items sold in marts and supermarkets decrease due to VAT exemption.
“It will bring about changes in prices related to items sold in supermarkets. Under this move, VAT on those items will be removed, so the price will be decreased,” he said.
Items without VAT such as vegetables and meats sold in general markets will not see the price decrease, he said.
“This measure by the government may offer purchase power to high-income people especially to those who buy items with VAT who are mostly high-income people buying vegetable and meats in supermarkets, but for those who are middle and lower-income people, they go to general markets where the buy-sell transactions are not subject to tax payment (VAT tax),” he said.
The move was made by the government through the Ministry of Economy and Finance implementing programmes for stimulating economic and social activities, particularly the COVID-19 cash transfer programme to help people hit hard by Covid-19.
Source: https://www.khmertimeskh.com/501006026/value-added-tax-on-food-items-exempted-for-two-years/