Cambodia: A Roadmap for Tax Expenditure Assessment

This technical assistance report responds to Cambodia’s Ministry of Economy and Finance request to support the development of a comprehensive framework for assessing tax expenditures. The report finds that Cambodia’s tax expenditures are widespread, costly, and largely unreported, with preliminary estimates pointing to sizeable fiscal cost. The assessment covers four major taxes—Personal Income Tax, Business Income Tax, Value Added Tax, and Specific Taxes (excises)—and recommends establishing clear benchmark tax systems, improving data quality, and institutionalizing regular tax expenditure reporting integrated into the budget process. The report emphasizes prioritizing capacity building, developing microsimulation models, and focusing evaluation efforts on the costliest tax expenditures to enhance transparency, fiscal discipline, and revenue mobilization.