Cambodia earns $75M from online tax revenue

CAMBODIA generated over $75 million in tax revenue from e-commerce last year, reflecting the country’s expanding digital economy, with the income derived from major global digital platforms, according to the General Department of Taxation (GDT).

Over the course of 2023, the country amassed 305.83 billion riel (roughly $75.52 million) from online transactions, including 64.96 billion riel ($20.98 million) from nonresidents registered for simplified value-added tax (VAT) registration and 220.87 billion riel ($54.54 million) from residents under the VAT reverse charge method.

The GDT report noted that the digital economy has been steadily growing each year, with e-business, particularly involving digital platform operators, seeing a substantial rise.

VAT collection from digital transactions, which commenced in April 2022, totalled about $37.62 million in 2022.

Currently, 84 companies, including Meta, Google,YouTube, TikTok, Netflix and others, have enrolled for simplified VAT registration, as per the GDT.

Chhin Ken, president of the Cambodia Digital Tech Association (CDTA), spoke to The Post on February 1, highlighting the burgeoning role of e-commerce globally, with daily transactions reaching hundreds of millions of dollars.

He said numerous companies are adapting to the trend, bolstered by the advent of the Industrial Revolution, or Industry 4.0, and the widespread use of technology and smartphones.

Ken pointed out that most of the country’s tax revenue in 2023 originated from large overseas companies, with local contributions remaining modest.

“I am optimistic about the accelerating adoption of technology for business in Cambodia. Technology now underpins the process of strengthening and expanding businesses, making operations easier for both owners and customers, eliminating the need for travel,” he said.

Ken anticipates a year-onyear increase in tax income from online transactions.

Lim Heng, vice-president of the Cambodia Chamber of Commerce, noted that e-commerce has been on the rise worldwide.

He said while online business tax revenue is a new concept in Cambodia, it has been long established in developed countries.

“Increasing tax revenue, including that from e-commerce, signifies an improvement in local business activities. We expect this revenue to grow further in the future,” he added.

The government introduced the e-commerce tax in June 2022. In 2023, the GDT reported the collection of $3.612 billion, marking a 4.49% increase from 2022.