The government has extended tax exemption – except for VAT – for the tourism sector for another three months for tourism businesses in Phnom Penh, Siem Reap and Preah Sihanouk provinces, to help stabilize them because the industry was hit hard by the Covid-19 pandemic.
The government’s July 15 announcement said the exemptions for monthly taxes will be valid from July to September for all hotels, guesthouses and tourist agencies that have been registered with the General Department of Taxation. However, VAT is not exempted.
“These businesses are still obliged to file tax-related documents [at the department or on its] website via the e-VAT online system every month during the tax exemption period,” said the announcement.
It said that in the context of Covid-19 the government had put in place urgent measures to proactively and responsibly deal with the crisis and control the spread of Covid-19 while helping the affected businesses continue operations.
After the country was widely reopened in late 2021 through the easing of health measures and travel restrictions, some sectors which were severely affected previously were able to mostly resume operations.
With restrictions lifted, exports in garments, footwear, travel goods and textiles had increased by 25.2 per cent in the first half of this year compared to the same period last year.
Although the number of domestic and international tourists is now increasing, some issues continue to threaten the tourism sector’s viability such as the possibility of a renewed outbreak of Covid-19 through a new variant.
Also, the increase in global inflation has put pressure on the wallets of potential visitors and prevented some from travelling, further impacting the tourism sector.
“The government has had the foresight to understand the necessity of issuing additional measures to control these impacts and to revitalize the tourism sector in this difficult time,” the announcement said.
The government also encouraged tourism businesses to improve the capacities of their staff so that they are able to qualify for loans from the Skills Development Fund (SDF).