Cambodia to Increase Tobacco and Beer Tax Rates

Dec.29.2022
Cambodia to Increase Tobacco and Beer Tax Rates
Cambodia to increase tobacco and beer taxes to boost national revenue, and implement tax incentives for pandemic-affected sectors.

According to a draft of Cambodia's 2023 Financial Management Law, the government plans to increase taxes on tobacco and beer in order to boost the country's revenue starting in 2023.


According to reports, the Cambodian government will continue to implement a series of tax incentives policies in 2023, including the recovery of sectors affected by the pandemic, such as the tourism industry. At the same time, the Cambodian General Department of Taxation will strengthen tax collection and management in areas with potential, such as construction, telecommunications, mining, beer, beverages, and tobacco.


Furthermore, the State Administration of Taxation will increase the efficiency of collecting Value-Added Tax (VAT) on goods or digital services provided through e-commerce, update information on companies with tax arrears, and strengthen tax collection and management supervision mechanisms.


Dr. Meng Guang, executive director of the Cambodia Movement for Health (CMH), has expressed support for an increase in tobacco taxes. He believes that this policy would be a win-win, as it would not only increase revenue for the country but also reduce the cost of public health services. Additionally, the number of people in Cambodia who become ill or die from tobacco-related products would also decrease.


According to a UN study, if Cambodia raises its tobacco tax rate to 75%, the country will generate an additional $235 million in tax revenue over the next 5 years, and $933 million over the next 15 years.


According to research conducted by the National University of Cambodia, 94% of citizens support the government's decision to increase tobacco taxation. This demonstrates the will of the Cambodian people to impose higher taxes on tobacco products.


Every year in Cambodia, about 15,000 people die from tobacco-related illnesses. Cambodian citizens spend approximately $649 million annually on tobacco, which amounts to 3% of the country's GDP.


Cambodia has one of the lowest tobacco tax rates in the ASEAN region, ranging from 25% to 31%. This is in contrast to Myanmar, which has a tax rate of 50% to 60%, Singapore with a tax rate of 67.5%, Vietnam with a tax rate of 35%, and Thailand with the highest tax rate of 70%.



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