Small businesses urged to apply for tax incentives

10 Jan 2019 2090 | Business & Trade Fairs

The General Department of Taxation is calling on small and medium-sized enterprise operating in a number of prioritised industries to apply for tax incentives created through a sub-decree last year.

The nation’s tax body issued last month a notification on the implementation of Sub-decree No 124, which set up tax incentives for SMEs in selected industries.

The notification letter, signed by GDT’s general director Kong Vibol, lays out the documents that firms will have to submit to enjoy access to the incentives.

It says that those applying for income tax, prepayment of income tax and minimum tax exemption must present their memorandum and articles of associations, business licenses – including the certificate of commercial registration – certificate of tax registration and patent card, business plan and financial statements, goods and services contracts, employment contracts and employee training plan, as well as rental agreement and property title certificate.

Firms who want to be eligible for tax deductions must submit the memorandum and articles of association, business licenses, business plan and financial statements, goods and services contracts and employee training plan.

The incentives target firms in agro-industry, food production and processing, manufacturing of local products, manufacturing of souvenirs and handicrafts for tourists, waste processing, assembling and IT research and development (including IT management services).

Keo Mom, CEO of LyLy Food Industry, told Khmer Times yesterday that her company is preparing the application.

“We appreciate the government is helping small businesses with these incentives, but lament that we still have to pay VAT and other excises which increase production costs.

“Our costs are high, but we cannot increase our prices because wholesalers and retailers are already working with really small profit margins,” Ms Keo said.

“We call on the government to also eliminate VAT and other excises for firms in agriculture, agro-industry and food production,” she said, adding that eliminating these costs will help them compete with Chinese and Vietnamese food producers.

Producers that are not generating profits due to high production costs often resort to purchasing lower quality raw materials, which results in a worse final product, she warned.