Phnom Penh, Cambodia – The Royal Government of Cambodia has formally announced a significant measure to bolster its crucial textile and garment industry: a three-year suspension of monthly income tax prepayments. This strategic decision, effective from January 1, 2026, until the end of 2028, is designed to ensure the sector’s long-term sustainability, invigorate export activities, and safeguard as well as create employment opportunities for thousands of Cambodian workers and their families who directly and indirectly benefit from this vital industry. The announcement was made by Deputy Prime Minister and Minister of Economy and Finance, Mr. Aun Pornmoniroth.
Mr. Aun Pornmoniroth further elaborated that this policy specifically targets Qualified Investment Projects (QIPs) within the textile and garment sector whose initial income tax exemption periods have concluded. The scope of this suspension covers a broad range of manufacturing enterprises dedicated to export. This includes companies producing textiles, clothing, footwear, handbags, purses, and hats. Additionally, it extends to businesses specializing in the production of labels for garments, gloves, socks, towels, pillowcases, duvet covers, bed sheets, and tablecloths, all intended for international markets.
To avail themselves of this valuable monthly income tax prepayment suspension, eligible enterprises are required to adhere to three fundamental conditions. Firstly, enterprise owners must diligently maintain accurate and proper accounting records, fully compliant with the prevailing tax laws and regulations, as well as current accounting and auditing standards. Secondly, businesses must consistently submit their tax declarations and fulfill all other tax and duty obligations by their respective deadlines, in accordance with existing tax legislation. Lastly, companies must provide an annual independent audit report to the General Department of Taxation.
The official announcement, signed by Deputy Prime Minister Aun Pornmoniroth on December 26, 2026, underscored the importance of compliance. It explicitly states that any enterprise failing to meet these three aforementioned conditions will have its monthly income tax prepayment suspension immediately revoked and will subsequently face various penalties as prescribed by the current laws and regulations.
