Cambodia garnered $62.8 million in e-commerce value-added tax (VAT) revenue during the first ten months of 2023, signifying a surge in electronic products and services in recent years. The income was collected from 82 non-resident taxpayer enterprises, supplying digital-related goods from abroad, according to the General Department of Taxation (GDT).
Kong Vibol, director-general of the GDT, stated in the report that levies on e-commerce is a burgeoning source of funds for the country. The government commenced the implementation of the contribution earlier this year, applying it to companies including Google, Facebook, YouTube, Alibaba, Microsoft and TikTok.
“Cambodia sees it has the potential to further increase the national budget revenue,” he said, adding that taxing foreign transactions also levels the playing field for local operators.
According to Vibol, online shopping platforms are increasingly shaping up as a significant lifestyle trend in the Kingdom, fostering opportunities for small-sized businesses, buoyed by the digital literacy of the populace and supportive government policies.
The GDT, under the Ministry of Economy and Finance, amassed $3 billion in tax revenue in the first ten months of 2023, achieving 85.8% of its budget target.
Vibol explained that modernisation has led to an enhanced rate of registration, improvements in taxpayer services and more efficient filing of tax returns, alongside the expansion of data storage facilities and other advancements.
Hong Vannak, an economist at the Royal Academy of Cambodia, highlighted the country’s relatively recent foray
into levying charges on e-commerce transactions, noting the rising popularity of online shopping globally.
He emphasised that an increase in the collection of these funds signals a boost in internet retail activities within the country.
“It is a budding success story for the GDT, stemming from improvements in making tax administration more accurate and transparent ... Tax revenues from e-commerce transactions are expected to continue their upward trajectory,” he predicted, noting that a flurry of new domestic investments has led to a consistent rise in overall tax yields.
Prime Minister Hun Manet, citing robust economic growth, stated that duty collections have risen significantly. He noted that the increase has enabled the government to construct essential infrastructure such as roads, bridges, buildings, schools and hospitals nationwide.
“The government will not create new taxes, nor increase the tax rate to add burden on the people,” the prime minister stated at the 19th Government-Private Sector Forum on November 13.
The Kingdom has two primary tax collection institutions: the General Department of Customs and Excise (GDCE), responsible for duties on goods entering and leaving the country, and the GDT, focusing on domestic fees like the VAT and income, salary and property taxes.
The government has set a target of $5.5 billion for proceeds from taxes and customs in 2023, marking an increase of nearly 16% compared to 2022, as per the GDCE.