$20.91m in VAT Collected in Three Months

Cambodia collected $20.91 million in VAT on e-commerce transactions in the first three months of 2023
General Department of Taxation, December 14, 2022. Kiripost/Siv Channa
General Department of Taxation, December 14, 2022. Kiripost/Siv Channa

Cambodia’s General Department of Taxation (GDT) collected $20.91 million in value-added tax (VAT) on e-commerce transactions in the first quarter of 2023.

This represents a 6.3 percent increase from the $1.26 billion collected in the same period in 2022. The GDT expects this growth to continue, as the digital economy, including e-commerce, is growing steadily in Cambodia, the report said.

The GDT collects a VAT of 10% on e-commerce transactions. Both resident and non-resident taxpayers are required to pay VAT, with resident taxpayers and non-resident required to register for VAT and file VAT returns on a monthly basis.

The report said there are 68 companies registered for VAT, including Meta, Google, Youtube, Tik Tok, and Netflix. These companies are all required to pay VAT on their e-commerce transactions.

The GDT is committed to improving its collection of VAT from e-commerce transactions in order to ensure that it can collect the revenue that it needs to support the development of the e-commerce industry in Cambodia.

In fact, in the Industrial Revolution 4.0, the digital economy is growing steadily yearly, including e-commerce, and the General Department of Taxation expects this sector to continue to grow. It will boost tax revenue from e-commerce and maintain sustainable growth yearly.

Ngeth Sophat, founder of eCO, said that strongly supports the e-commerce industry paying taxes, as taxes are a major source of development for the country.

However, he added that it is unfair for e-commerce platforms to pay VAT tax at this stage. Instead, e-commerce platforms should pay income tax, as the overall market does not pay VAT tax, and this would make e-commerce platforms more expensive.

He emphasized that major problems and challenges are that internet access is not stable in many communities, lack of trust among users, and need for more explanation and education about e-commerce.

This limits the market size for e-commerce startups, as many people in Cambodia are not familiar with e-commerce and may be hesitant to use a platform if they do not understand how it works, he said.

“Most e-commerce startups focus on showcasing their technology and features but neglect to train end-users on basic digital trends,” said Sophat.