The Cambodian government has given tax breaks to several sectors this year in a bid to try to help offset losses caused by the COVID-19 pandemic. One of those included is tourism-related businesses. But hotels across the Kingdom are still struggling. If things don’t change soon, many hotel owners say they see no other option but to close.
In February this year tax relief was rolled out to hotels and guesthouses across Siem Reap province because of the dreaded COVID-19 and lack of tourism that it brought with it. Then, as the months passed, borders stayed closed as the pandemic continued to cause havoc across the world, in turn pushing the government to give tax relief to tourism-based businesses across the country as an essential part of one of the pillar industries.
The tax relief is helping businesses throughout the country. However, many businesses report that it is still a drop in the ocean in the grand scheme of things because they are still (in some cases) having to pay full rents and they aren’t receiving any custom.
Remi Dee, general manager of Villa Langka Hotel in Phnom Penh, said: “We are grateful that the government was able to give us tax relief and they have also told us that our tourism licence for 2021 will be free. However, the government recommended that landlords should help tenants in the tourism industry by decreasing rent prices and not all landlords are following these recommendations.”
“Our hotel is split into two. This means that we have two separate landlords and two different contracts. One of those landlords is giving us a 30 percent discount on the rent and has done since April. The other landlord refuses to help us at all. We have met them and asked for help several times yet they still refuse to give any discount even after 10 years of paying our rent on time.”
Hotel and guesthouse owners are crying out for more help. They are still open and paying their overheads but without any check-ins because it is a struggle for people to get into the country.
“The government could help us by allowing people in for business purposes without big deposits. For sure, mass tourism won’t be back for a long time but before COVID-19, 25 percent of our guests were here for business anyway. We have also had some discount on our electricity bills but that only equated to a few dollars. More discounts would be appreciated because we are still open and selling rooms at a very low rate so our incomes have drastically been reduced but our expenses are still very high.”
He added: “Put it this way: Before the pandemic, I was in charge of three hotels. Two have already closed. The third one can still survive for another year but only with a lot of effort and help from landlords and the government.”
Monthly tax and e-VAT filings are still required during the exemption period and the tax-exempt entities were still required to file their annual income tax return for 2019 before the end of March 2020. However, entities that have to pay any additional profit taxes have been allowed to do so in monthly installments, between now and November.
This article was first published in Khmer Times. All contents and images are copyright to their respective owners and sources.