23 August 2023
Non-governmental organisations (NGOs) are advocating an additional tax of 500 Riels per pack of cigarettes to minimise smoking-related deaths and diseases.
The government has already implemented a value-added tax (VAT) on cigarettes to combat the health risks associated with smoking and tobacco products. Companies importing and distributing cigarettes in Cambodia must apply a flat rate of 10% VAT on tobacco products.
Implementation of VAT on cigarettes will follow the same procedures as applying VAT to other taxed commodities. Companies must pay the VAT at the point of importation or domestic purchase. However, the Ministry of Economy and Finance has announced that the VAT paid can be claimed as an income tax credit, which can be deducted from output tax.
Enterprises importing cigarettes pay a one-off value-added fee at the point of importation. This measure aims to support the country’s export industry while ensuring appropriate taxes are imposed on tobacco products.
Dr Mom Kong, executive director of Cambodia Movement for Health, said yesterday that he strongly supported the ministry’s guidelines on the implementation of value added tax (VAT) on imported cigarettes.
Requiring importers and distributors of cigarettes to apply the tax in order to reduce the number of deaths in Cambodia caused by smoking.
According to research by the World Health Organization (WHO), if Cambodia imposes the additional tax on cigarettes, it will lead to a 15% increase in the price, leading 30,000 less smokers per year, preventing 10 deaths over the next 10-15 years, and will increase the state’s tax revenue by more than $53 million a year.
The additional tax of 500 Riels per pack was supported by the people because cigarettes cause many deaths every year, Dr Kong said.
“I appeal strongly to the ministry to consider adopting the additional tax of 500 Riels per pack, although the ministry’s working group has not finalised the levy and could be higher than we have asked,” he said.
Tobacco users are at risk of morbidity and early mortality from cancer, cardiovascular disease, respiratory illnesses, and many other tobacco-attributable diseases, he added.
The implementation of VAT on cigarettes in Cambodia is a significant step towards combating the health risks of smoking and tobacco products. The government’s commitment to promoting public health is evident in its decision to introduce this tax and consider extending it to e-cigarette products, he said.
Kloeung Moniroth, a resident living in Phnom Penh supported the additional tax on cigarettes to ensure people’s well-being, as he sees there are many young people smoking.
“I don’t want to see young people smoking as it will have a bad impact on their health, so if the government imposes the levy it may stop young people from smoking and contracting smoking related illnesses,” he said. #