Accepting the request of the Textile, Apparel, Footwear and Travel Goods Association in Cambodia (TAFTAC), the Cambodian government has agreed to suspend the advance Income tax for all eligible textile businesses till 2025.
The association sent an SOS to the ministry of economy and finance in October to extend the suspension of advance income tax of enterprises in the textile and garment industry.
After an in-depth analysis, the Cambodian government found that textile and apparel orders of Cambodian exports have dropped in view of the current global turmoil triggered by the Ukraine-Russia war. As the situation is not likely to change in 2023 the orders are likely to continue to decline this year as well. The advance income tax relief would take the burden of the textile industry to some extent only.
The tax break is subject to some eligibility criteria that take into account the scale and scope of operations, sustainability in production processes, and the support that enterprises give to their workers. The Cambodian government the items that are produced by businesses that are entitled to the tax break. These items include garments, textiles, hats, footwear, and bags.
