Civil servants earning less than 1 million riel (about $250) per month will no longer have to pay income tax under a draft budget for 2017, Prime Minister Hun Sen announced in a speech on Thursday.
The move would be the latest in a series of attempts by the ruling Cambodian People’s Party to court the influential sector ahead of elections scheduled for 2017 and 2018.
Hun Sen said the current tax-free threshold would be raised from the current rate of 800,000 riel, or about $200.
Benefiting most from the changes would be teachers, the armed forces, and other civil servants, he said.
A parliamentary session is scheduled for October 21 to approve the bill, which would be formally adopted in early November.
“To cut down the difficulties of the civil servants, the armed forces, especially teachers and nurses ... we moved from 800,000 riel to 1 million riel, that will not be taxed on their salaries,” Hun Sen said.
The announcement came just days after the premier announced that the base salary for teachers would be increased by April to 950,000 riel (about $237).
Sorn Chey, a rights worker with the Affiliated Network for Social Accountability in East Asia and the Pacific, said the government must also institute changes to the way tax was collected from wealthy members of society.
“The state must have a mechanism to collect taxes from all the rich, and I think our national budget will see a huge increase, therefore we can use it to promote welfare services for low-wage people and their living conditions, especially the poor,” he said.
Government to Slash Tax on Low-Paid Civil Servants