The Ministry of Economy and Finance granted tax relief to private water operators who are categorized as small and medium taxpayers on July 1, 2025, through Letter No. 6816 MEF.LS. The goal of this program is to promote private sector investment in Cambodia's water infrastructure, especially in underserved and rural areas where infrastructure deficiencies still exist. Since the tax relief is prospective in nature, it does not apply to taxes or penalties that have already been paid.

The following important clauses are included in the tax relief:

• exemption from income taxes, income tax prepayment, and the 1% minimum tax, which takes effect on the day the operator first makes money.
• 0% VAT on domestically produced goods and services utilized while clean water infrastructure is being built. This includes chemicals and transportation services required for the production and distribution of clean water.

Private water operators must carry out new or expanded projects between 2025 and 2030 that are approved by the Ministry of Industry, Science, Technology & Innovation (MISTI) and registered with the General Department of Taxation (GDT) for tax purposes in order to be eligible for these incentives. Operators also need to fulfill the following criteria:

• Provide GDT with a list of domestic vendors for products and services;
• guarantee that their employees are properly trained in clean water operations, as approved by MISTI;
• Create and carry out a water quality management strategy that complies with MISTI's technical requirements.
• Under Cambodian tax law, noncompliance with these rules may result in penalties, tax reassessments, and other legal repercussions.