The Cambodian government has announced a new tax relief measure, aimed at easing daily living expenses in the Kingdom. For a three-year period, locally-produced essential food items will not be subjected to Value Added Tax (VAT). The policy will take effect from January 1, 2026, and will remain in force until the end of 2028.
The decision comes at a time when the government is actively encouraging the use of locally produced goods, as many citizens boycott Thai imports due to the current border dispute. The new policy was announced today, December 1, by the Ministry of Economy and Finance.
According to the proclamation, the exemption applies to locally produced basic food items that are considered necessary for daily consumption. These include: meat from farmed animals (fresh or processed), eggs of all types (fresh or processed), freshwater and saltwater fish, including shrimp, prawns, crabs, and related aquatic products (fresh or processed).
It also applies to all types of sugar except crystallised sugar, all types of salt, and fish sauce and soy sauce.
The VAT on these products will be covered by the state. The exemption does not apply to prepared food sold by restaurants.
This policy was issued under Proclamation No. 171 dated March 20, 2024, concerning the state’s assumption of VAT on basic food items for citizens. Any regulations that contradict the new proclamation are now considered void.
