The General Department of Taxation (GDT), under the Ministry of Economy and Finance, has revealed a revised tax structure for locally produced non-alcoholic beverages. This move aims to foster better health and bolster national revenue.
Effective September 1, a special tax rate modification will be implemented on various categories of non-alcoholic drinks, it said.
In an official announcement signed by GDT director-general Kong Vibol August 15, the new tax rates were outlined. Energy drinks will now be subject to a 15 per cent “special tax”, while other non-alcoholic beverages will incur a five per cent tax. The latter category includes pasteurised dairy products, soy milk, coconut water and coffee-based drinks (including coffee-flavoured varieties), and carbonated beverages.
An additional 10 per cent special tax on non-alcoholic beverages beyond those specified earlier is stipulated as well. These alterations are guided by provisions laid out in Prakas No 012 issued on January 14, 2020, which pertains to the framework for determining special taxes on select goods.
The GDT explained that the special tax on various domestic products – such as beer, wine, cigarettes, cigars, non-alcoholic beverages and other items subject to special duties – is based on 90 per cent of the recorded supply price on the original sales invoice. This calculation excludes other taxes such as the value-added (VAT) and public lighting tax.
Mom Kong, executive director of the NGO Cambodia Movement for Health (CMH), commended the tax adjustments as a step towards mitigating non-communicable diseases (NCDs) – a concern also shared by many other nations. Kong noted that NCDs often stem from four primary risk factors: tobacco, alcohol, lack of physical activity, and unhealthy dietary habits. By modifying and potentially increasing taxes on sugary beverages, the initiative could contribute to curbing the prevalence of such diseases.
Statistics revealed that while communicable diseases accounted for just 27 per cent of total deaths, a substantial 73 per cent were attributed to other diseases, he said.
Kong advocated for the government to further raise tariffs on tobacco and alcohol products. He emphasised the urgent need for increased taxation, pointing out that tobacco tariffs have remained stagnant for eight years.
The current special tariffs on locally produced alcohol and tobacco products include a 30 per cent tax on all beers, 35 per cent on alcoholic beverages, and 20 per cent on various types of cigarettes.
“The push for higher tobacco taxes aligns with public sentiment. A 2021 joint study by the Ministry of Planning and the Ministry of Health reported that 94 per cent of respondents favoured increased taxes on tobacco products. This move not only holds the potential to reduce illness and mortality rates but also generates revenue for national development,” added Kong.
Separately on August 15, the GDT initiated inspections and assessments for the installation of security cameras at Cambodia Brewery in Preah Sihanouk province. This step seeks to bolster efficiency and transparency, facilitating fair competition while upholding obligations to secure a sustained upswing in tax revenue.
As Cambodia takes decisive measures to balance public health objectives with economic considerations, the revised tax rates on non-alcoholic beverages stand as a tangible stride toward a healthier society, it said.