The government has extended a suspension on prepayment tax on income in the textile sector until the end of 2025 in a move that aims to help the sector, which has been affected by decline in orders.
In a Prakas issued on January 6, the Ministry of Economy and Finance said that the suspension is for the benefit of sustaining qualified foreign investments and workers in the textile, garment, shoe, hats and handbag industry.
The Prakas added that companies that qualify for these suspensions are those with correct accounting practices, have paid other taxes on time, and have provided annual audits to tax officials.
Kaing Monika, Deputy Secretary-General of the Garment Manufacturers Association of Cambodia (GMAC), briefly commented when asked by Kiripost. However, he sent a letter which GMAC passed on to the government for the suspension.
"The situation in the early year is still unclear. The order situation is still weak,” Monika told Kiripost.
GMAC sent the letter in October to the Ministry of Economy and Finance to extend the suspension for an additional five years, from January 1, 2023, until the end of 2027.
The letter argued the suspension is necessary due to the global economic downturn brought on by many factors, including Covid-19, the war in Ukraine, rising inflation, and climate change, which have all significantly impacted the garment, textile, and footwear industries.