Lo­cal SMEs await pro­ce­dural de­tails from tax au­thor­i­ties

The Phnom Penh Post - - BUSINESS - Hin Pi­sei

SMALL and Medium En­ter­prises (SMEs) are still wait­ing for tax au­thor­i­ties to pro­vide pro­ce­dural de­tails af­ter the govern­ment an­nounced tax in­cen­tives for SMEs in six pri­or­ity sec­tors three months ago, said Fed­er­a­tion of As­so­ci­a­tions for Small and Medium En­ter­prises of Cam­bo­dia (Fas­mec) op­er­a­tions man­ager Ly Visal.

Speak­ing on Thursday, he said: “Ac­cord­ing to the Gen­eral Depart­ment of Tax­a­tion [GDT], the de­tailed pro­ce­dure for tax ex­emp­tions for the six pri­or­ity sec­tors an­nounced by the govern­ment will be com­pleted by the end of Jan­uary.

“Af­ter news of the tax ex­emp­tion, many com­pa­nies and busi­nesses ex­pressed their de­light, but still look for­ward to see­ing the [GDT’s] [ap­pli­ca­tion] pro­ce­dure.”

Ac­cord­ing to the sub-de­cree on SME tax in­cen­tives signed by Prime Min­is­ter Hun Sen on Oc­to­ber 2, six pri­or­ity sec­tors, which in­clude agro-in­dus­tries as well as food pro­duc­tion and pro­cess­ing will re­ceive an ex­emp­tion on in­come tax from three to five years.

The re­main­ing four pri­or­ity sec­tors are man­u­fac­tur­ers of prod­ucts used in waste pro­cess­ing and tourism, man­u­fac­tur­ers of parts and equip­ment sup­plied to other man­u­fac­tur­ers, re­search and devel­op­ment of in­for­ma­tion tech­nol­ogy – in­clud­ing in­no­va­tive equip­ment-man­age­ment ser­vices and en­ter­prises de­vel­op­ing SME com­mer­cial dis­tricts.

The new sub-de­cree says that any SME in­tend­ing to re­ceive a five-year ta x ex­emp­tion must use at least 60 per cent do­mes­tic raw ma­te­ria ls, in­crease t he num­ber of em­ploy­ees by at least 20 per cent or be lo­cated i n SME dist r icts.

Chen Sopheap, founder and man­ag­ing di­rec­tor of Keiy Tam­banh Kh­mer, which sells pha muong, se­ung and other tra­di­tional Kh­mer silk prod­ucts, said she is cur­rently not reg­is­tered with the Gen­eral Depart­ment of Tax­a­tion be­cause there is in­suf­fi­cient le­gal doc­u­men­ta­tion for tax­a­tion, though she notes that her com­pany is in­el­i­gi­ble due to its small num­ber of staff and low in­come.

“I have not yet reg­is­tered with the GDT, be­cause do­ing so re­quires many stan­dard­ised doc­u­ments,” she said, ad­ding that, “nowa­days, I am also study­ing and prepar­ing doc­u­ments to pre­pare for reg­is­tra­tion”.

Cur­rently, there are more than 500,000 SMEs in the King­dom, though only 40,000 are reg­is­tered, ac­cord­ing to Fas­mec pres­i­dent Te Taing­por.

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