GDT Raises Taxes on Non-alcoholic Beverages

The GDT has announced a series of tax hikes on various non-alcoholic drinks in a move that is believed to be beneficial for the nation’s public health
A person drinks an energy drink in Phnom Penh. Kiripost/Siv Channa
A person drinks an energy drink in Phnom Penh. Kiripost/Siv Channa

The General Department of Taxation (GDT) has announced new tax rates on locally-produced, non-alcoholic beverage products, according to the Ministry of Economy and Finance (MEF).

The MEF statement states that from September 1, all local non-alcoholic beverage enterprises must adjust special tax rates on non-alcoholic beverages produced and supplied locally.

According to the announcement on August 15, there are three special tax amendments. The first sets a special tax rate of 15​ percent for all types of energy drinks.

Second is a special tax rate of 5 percent on some non-alcoholic beverages. These include ultraviolet milk-based beverages, soy milk, and coconut-based beverages, coffee-based and coffee-flavored beverages, and aerated beverages for instant consumption without dilution.

The third point sets a special tax rate of 10 percent on non-alcoholic beverages other than those already specified.

The statement added that the special tax base will be implemented in accordance with Prakas No. 012 dated January 14, 2020 on the revision of the special tax base on some domestically-produced goods.

Hong Vanak, an economic analyst, welcomed the move, which he believes will bring about health benefits. As previously reported in Kiripost, parents have raised concerns about the consumption of sugary snacks and drinks in schools causing a spike in child obesity.

He stated, “I think it has to do with health because it can have health benefits as non-alcoholic soft drinks also affect the health of people across the country. When we raise taxes, it may reduce demand because factories will raise the selling price to the market.”

He added, therefore, this can lead to a reduction in consumption of non-alcoholic beverages, also contributing to the promotion of public health.

As for the impact of the tariff increase, he noted that it may have an effect on factories that produce non-alcoholic beverages. But to prioritize public health, the government has to implement such measures.

He said, "It is not different from alcohol. If we want to reduce the number of alcoholics, we have to raise the tax on alcohol so that only the rich can buy it. This is a way of managing the economy, as well as governing the state. It is necessary to prevent all these problems.”

The GDT is now urging all business owners of non-alcoholic beverage products to implement the relevant taxes by the deadline.

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