The National Assembly on Wednesday passed a new law on taxation that has been in draft for years, as part of efforts to bolster the government’s tax collection process.
In a statement posted on its Facebook page, the National Assembly said that the new law, which has 20 chapters and 255 articles, will also contribute to the promotion of Cambodia’s business sector, increase the favorable investment environment, strengthen the level of fiscal compliance, and ensure fair competition.
National Assembly spokesperson, Leng Penglong, said on Wednesday that the law sets out the rules, procedures and conditions, as well as compiles the tax regulations to regulate the work of collecting tax for the benefit of the state.
The law is an update of old tax laws issued in 1985 and 1997 that adds additional laws and regulations to meet the needs of tax collection as it evolves, Penglong said.
“This law aims to ensure the sustainability of revenue collection and economic growth, fair and equitable competition and social equity, as well as continue to improve the quality of services for taxpayers to be simple and easy to pay taxes,” Penglong told Kiripost.
Suos Yara, a lawmaker from the ruling Cambodian People’s Party (CPP), said that the new tax law is a comprehensive collection of many legal instruments designed to simplify and ease tax collection and payment processes for both public and private sectors.
Yara said that it annulled two tax laws in 1997 and the amendments in 2003.
“This new law is surely among the most important laws Cambodia can enact. One of its functions is to ensure that the government can raise sufficient revenues to pay for the public goods and services demanded by the Cambodian people,” Yara told Kiripost.
“It also plays an important social engineering role within Cambodia’s market economy by redistributing wealth from income generating individuals and companies to poorer families.”
He added that when needed, such as during the Covid-19 pandemic, the government can use the law to create tax exemptions to relieve burdens from struggling enterprises.
“This law will transition the Cambodian economy into a digital society and surely put Cambodia on the right path towards a middle-income country in 2030 and high-income country in 2050.”