New Income Tax for Garment Factory Workers in Cambodia

Beginning this month, staff at gar­­ment factories that earn more than $125 per month will see their sa­laries deducted between 5 percent and 20 percent in income taxes to the Ministry of Economy and Fi­nance, several union leaders claim­ed Thursday.

Chhuon Se, head of union workers at Phnom Penh’s Terratex garment factory, said his company post­ed a notice stating that the tax will take effect June 1 and will be de­­­ducted from workers’ salaries at the end of the month.

Workers earning more than $125 per month will be taxed 5 percent; those earning more than $250 will be taxed 10 percent; workers earning more than $2,125, 15 percent; and more than $3,125, 20 percent, Chhoun Se said, reading from the Finance Ministry’s no­tice.

Chuon Mom Thol, president of the CPP-backed Cambodian Un­ion Federation, said the income tax has, in fact, been established under law for years but has not, until now, been implemented throughout the industry.

He worried that the tax would even­tually extend to those garment workers who earn lower wages.

“If the government asks our work­ers, who earn $45 to pay sa­lary tax, it means they kill them,” he said. “This tax should be first practiced with NGO workers and em­bassy staff who earn upwards of $200 per month in wages.”

Mam Nhim, president of the Na­tional Independent Federation of Tex­tile Unions of Kampuchea, de­plored the tax, which she said would hurt those workers who labor overtime to support their families.

“They just earn $45, which is not enough to survive, so they work over­time to earn more for their daily living, so why does the gov­ern­ment tax them [for] overtime?” she asked. “They work so hard to earn $100 per month. If the government taxes them, how will they live?”

Mao Thura, undersecretary of state for the Commerce Ministry, de­­­fended the tax on Thursday, saying it is common practice in other countries.

“I’ve paid [income tax] for years already. My salary is $350 per month,” Mao Thura said. “The more you earn, the more tax you pay for the state.”

Attempts to reach Finance Ministry officials were unsuccessful Thursday