On November 17, 2025, the Ministry of Economy and Finance issued Prakas No. 948, extending Value-Added Tax (VAT) support measures for basic food items until December 31, 2028. Although the regulation repeals the previous Prakas No. 171 and maintains the goal of reducing living costs, it introduces a significant shift in policy by differentiating tax treatment based on the origin of goods.

Key Policy Changes:

• Domestic Products: Basic food items produced locally are exempt from VAT as a state charge at all stages of supply.
• Imported Products: Basic food items that are imported remain subject to VAT at the importation stage.

WTO Compliance Concerns

This departure from the previous origin-neutral approach raises potential legal issues regarding Cambodia’s World Trade Organization (WTO) commitments. Since VAT is considered an internal tax, the disparate treatment may violate the National Treatment obligation under Article III:2 of GATT 1994, which forbids taxing imported products more heavily than "like" domestic products. Unless a specific exception applies, the measure risks being deemed inconsistent with international trade rules.