Tax preferences have been offered to small and medium enterprises (SMEs) as incentives for encouraging informal ones to register and update business information.
In an announcement this week, the ministry said the benefit will be given to those who are in six prioritised sectors: agriculture and ago-agricultural production; food production and processing; manufacturing of products for domestic uses; waste processing and products for tourism; technology information research and development. The benefit is income tax exemption for up to five years, tax deduction exemptions up to five years and incentives over deductible expenses.
To benefit from the tax preference, new SMEs are subject to register at a taxation administration and registered SMEs are asked to update their business information, according to the ministry.
The application on tax preferences shall be done within seven to 10 business days after the applications are submitted to the General Department of Taxation, a statement added.
The new incentives are to encourage informal SMEs to register formally so they can be regulated.
According to the Ministry of Industry and Handicraft, there are about approximately 500,000 SMEs in the country, but only 52,154 are registered formally, employing a total of 824,245 workers nationally.
Minister of Industry and Handicraft Cham Prasidh told Khmer Times in late January that the ministry is working to encourage those who run informal SMEs to register to become formal, allowing these businesses to benefit from the government’s policy to help SMEs, including financial services.
The ministry is focusing on the leading SMEs whose owners want to expand their business.
“We are now working to help the SME sector where entrepreneurs have plans to expand their business to register to get support from the government and grow,” Prasidh said.
This article was originally published in KHMER TIMES