Income tax threshold raised again

Hor Kimsay | Publication date 17 January 2018 | 19:35 ICT

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Traffic passes in front of the General Department of Taxation office last year in Phnom Penh. Hong Menea

Workers in Cambodia who make over $250 should start to see more money in their paychecks starting this month, as the government has raised the withholding income tax threshold for the third straight year.

Previously a workers’ income was tax-free up to $250, but that number has now increased to $300, according to an announcement from the General Department of Taxation dated January 15.

The notification from the tax department follows an announcement of the new rate from Prime Minister Hun Sen in October last year. The premier pledged to raise the threshold as part of a series of populist policies ahead of elections set to be held later this year.

This is the third straight year the income tax threshold has been raised. Last year, the government increased the lowest taxable income threshold to $250, up from $200 in 2015 and $125 in 2014.

The new minimum wage for textile and footwear workers will also take effect this month, as workers in those industries will begin to take home at least $170 a month, up 11 percent from 2017.