Tax Incentives in Cambodia

Author/Editor:

Manuk Ghazanchyan ; Alexander D Klemm ; Yong Sarah Zhou

Publication Date:

March 29, 2018

Electronic Access:

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary:

Cambodia, like its regional peers, offers a number of tax incentives to investors. This paper reviews these incentives to assess their costs and benefits, including their likely effectiveness in attracting capital and in supporting the diversification strategy. It finds that an important incentive, the tax holiday, differs materially from practice elsewhere in offering a deferral rather than exempting from tax and may not be very effective. Moreover, other features of the tax system, such as the high withholding rate on dividends, imply relatively high effective tax rates for foreign investors. The paper discusses potential reforms that weigh revenue and other costs of tax incentives against the need for a competitive tax system, including a shift from tax holidays toward investment allowances.

Series:

Working Paper No. 18/71

Subject:

English

Publication Date:

March 29, 2018

ISBN/ISSN:

9781484347522/1018-5941

Stock No:

WPIEA2018071

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

22

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