Phnom Penh, Cambodia – Amidst rising global fuel prices, which are significantly impacting the livelihoods of Cambodian citizens, a growing consensus among health professionals and economic experts points towards a strategic solution: increasing taxes on alcohol and tobacco products. This approach is widely viewed as a “win-win” measure, promising substantial benefits for both the national economy and public health. Experts note that current tax rates on imported cigarettes, domestic tobacco, beer, and wine in Cambodia remain comparatively low when measured against international standards.
Dr. Mom Kong, Executive Director of the Cambodia Movement for Health, has specifically urged the government to thoroughly consider the adverse effects of global fuel price hikes, which are exacerbated by ongoing geopolitical conflicts involving regions such as Israel, America, and Iran. From his perspective, implementing higher special excise taxes on alcoholic beverages and tobacco products would significantly boost national revenue, thereby strengthening the country’s economic resilience during challenging times.
Dr. Kong highlighted that Cambodia has not increased its special excise tax on tobacco products for over a decade, a period during which many neighboring countries have progressively raised theirs. Currently, the tax rate on tobacco products in Cambodia, when compared to retail prices, stands at merely 25 percent for domestic cigarettes and 31 percent for imported cigarettes. For alcoholic beverages, the special excise tax is 30 percent for beer and 35 percent for wine, in addition to a standard 10 percent Value Added Tax (VAT).
These figures starkly illustrate that Cambodia’s special excise tax rates on alcohol and tobacco products are significantly lower than those in several regional nations. For instance, Vietnam applies special excise taxes ranging from 25-50 percent on wine and beer, and 65 percent on tobacco. Thailand imposes a 60 percent special excise tax on alcoholic products and 85 percent on tobacco. Meanwhile, the Philippines and Singapore maintain special excise taxes on tobacco products that are no lower than 70 percent, emphasizing a regional trend that Cambodia has yet to fully adopt.
According to Dr. Mom Kong, increasing these special excise taxes represents a genuinely “win-win” strategy. It would provide the government with much-needed additional revenue to support the national economy, while simultaneously reducing the incidence of disease and premature deaths linked to alcohol and tobacco consumption. He explained that the first “win” translates directly into fewer health problems and fatalities among citizens. He stated, “When people fall ill, they seek healthcare services, and providing these services becomes a significant financial burden on the government’s budget.”
Dr. Kong further elaborated on the economic advantages: “When we raise the special excise tax on tobacco and alcoholic products, the state will receive additional tax income. This revenue can then be strategically allocated to meet the country’s current essential needs, such as enhancing the quality of social security services or subsidizing fuel costs that citizens are currently struggling with due to price increases.”
Dr. Prom Davi, an economic researcher at the Royal Academy of Cambodia, echoed these sentiments, affirming the positive impact of increasing special excise taxes on alcohol and tobacco. She emphasized that generating additional revenue from taxes on non-essential goods is an excellent measure for national socio-economic development. This income can be strategically invested in critical public services, including the construction of schools, hospitals, and various other public infrastructures vital for national progress.
A 2019 United Nations study on investing in tobacco control further supports this stance. It projected that if Cambodia were to raise its tobacco tax to 75 percent, the country could generate an additional $235 million in tax revenue over the next five years. This figure is estimated to soar to $933 million within 15 years. Beyond the financial gains, such a tax increase is also expected to significantly reduce mortality, illness, and disabilities caused by tobacco product consumption, highlighting the profound public health benefits.
Economic data from the Ministry of Commerce also underscores the current situation. A report indicates a substantial outflow of funds for these products, with Cambodia projected to spend $258 million importing cigarettes in 2025, marking an increase of over 10 percent compared to 2024. Concurrently, imports of various beers and mixed wines amounted to $23.7 million, even though Cambodia is home to nearly ten domestic beer production companies. These figures underscore the economic impact and potential for significant revenue generation through revised taxation policies, which could redirect funds towards national development and public welfare.
