Workers earning less than $300 each month will no longer be taxed on their earnings from January 2018, Prime Minister Hun Sen announced yesterday.
Workers earning $250 are currently taxed at the lowest rate of five percent, but the new bracket will only include those earning $300 to $375 from the start of next year.
Employees earning between $375 and $2,125 will be taxed at 10 percent.
Those with a monthly income of between $2,125 and $3,125 will be taxed at 15 percent, while those earning in excess of this will pay 20 percent.
Speaking at the launch of a vocational education and training policy, Mr Hun Sen said compensation for public servants who die will also increase next year, while 5,000 athletes in the country will get free public bus rides.
He said compensation for public servants who die as a result of sickness will rise from $300 to $500, while the amount paid out for occupational fatalities will increase from $375 to $1,000.
The premier said the increase is temporary and compensation will rise further to bring payments for civil servants into line with the armed forces.
“The increase does not go far enough so we need to rethink it because the gap in compensation between the armed forces and public servants is a bit too much,” he said.
He said members of the armed forces get compensation worth 26 months of their salary if they die during a mission and seven months of salary when they die of sickness, as well as extra cash for a funeral.
Heak Pring, president of Cambodia’s Independent Civil Servants Association, applauded the move. “It shows the government is paying attention to and taking care of public servants,” he said, adding it is a step in the right direction, despite not being enough.
Mr Hun Sen said the tax changes have been included in the draft of the 2018 national budget and will need to be approved by the National Assembly.