Cambodia exempts VAT on local food to ease living costs

kiripost

Cambodia’s Ministry of Economy and Finance has announced that locally produced food will be exempt from Value-Added Tax (VAT) from January 2026 until the end of 2028, a move aimed at easing household expenses and stabilising the domestic market.

The exemption covers staple items such as meat, eggs, freshwater fish, crab, shrimp, sugar, salt, and sauces, along with processed seafood. Restaurants, however, remain outside the scope of the measure.

Economist Duch Darin welcomed the decision, noting that it would relieve families facing rising living costs and price pressures from imported goods. He argued that the policy could help households redirect savings towards food security, education, and future planning. “This is a reasonable policy decision as it could lower the daily cost of living for people,” he said, stressing the importance of keeping essential foods affordable.

The measure is also expected to stabilise market prices by giving producers and sellers greater certainty. Darin suggested that businesses would benefit from clearer pricing structures, encouraging investment and continuity in local supply chains.

Sron Pov, President of the Cambodia Livestock Raisers Association, described the exemption as unprecedented support for farmers and producers. “We are happy that the government is taking care of us until 2028,” he said, urging livestock farmers and entrepreneurs to seize the opportunity. He added that avoiding VAT on these goods would ease costs for traders and cultivators, strengthening the sector as a whole.

Yet Pov also called for further reforms, particularly in reducing electricity and transport costs to match neighbouring countries. He warned that without such measures, imports could continue to undermine local businesses. “Please support local production and help prevent imports that are causing our businesses to collapse,” he said, highlighting the risks faced by farmers if production costs remain high.

The VAT exemption is seen as part of a broader effort to protect Cambodian families from inflationary pressures while bolstering domestic producers. By cutting taxes on essential foods, the government hopes to ensure affordability, encourage local production, and safeguard livelihoods across the country.

-2025-12-02