Phnom Penh (FN), Mar. 14 – Cambodian Prime Minister Hun Manet announced a decision to reduce the withholding tax on domestic airlines from over 10 per cent to just 2 per cent to alleviate financial pressures on the sector.

The premier spoke on Friday (Mar. 14) during the closing ceremony of the 2024 Cambodian Oknha Association annual meeting at Premier Centre Sen Sok in Phnom Penh.

Samdech Thipadei underlined that while reducing tax rates for the private sector may result in a loss of government revenue, it is necessary to support business survival.

Samdech Thipadei underscored, “A few days ago, I reduced the tax rate for domestic airlines, cutting the withholding tax from 14 per cent to 2 per cent. Additionally, we will establish certain principles to ease the burden on key sectors, such as tourism.”

It should be noted that the aviation industry was severely impacted by the COVID19 crisis due to a drastic reduction in flights. To mitigate these challenges, the Royal Government of Cambodia has introduced several incentives, including tax relief. In September 2024, the government extended withholding tax and special tax incentives for airlines until 2027.

According to the Civil Aviation Authority of Cambodia, the country’s three international airports—Phnom Penh, Siem Reap, and Sihanoukville—are connected to 12 countries and the Special Administrative Regions of China, including Hong Kong and Taiwan, covering a total of 34 international destinations. Currently, five national airlines and 26 international airlines operate in Cambodia.

In 2024, air passenger traffic reached 6.24 million, marking a 22 per cent increase compared to 2023, which saw 5.11 million passengers. Air cargo transportation totalled 77.8 thousand tons, reflecting a 40 per cent increase from the 55.7 thousand tons recorded in 2023. The total number of flights in 2024 was 58,354, representing a 14 per cent rise from the 51,149 flights in 2023.
=FRESH NEWS