Cambodia Renews Siem Reap Tourism Tax Breaks Amid Visitor Decline. Cambodia has decided to bring back a full year of tax exemptions for tourism businesses in Siem Reap for 2026. The move comes as visitor numbers continue to fall, raising concerns across the industry. Under the latest announcement from the Ministry of Economy and Finance, tourism enterprises in Siem Reap will be exempt from all types of monthly taxes except value added tax and accommodation tax from January to December 2026. Businesses will also receive an income tax exemption for 2026. If any income tax has already been paid for that year, it will be treated as a tax credit and can be deducted from income tax liabilities in 2027. In addition, enterprises will not face tax audits for the 2026 tax year. The policy applies to registered hotels, guesthouses, restaurants, and travel agencies operating in Siem Reap.
However, the tax holiday does not mean a free pass on compliance. Medium and large taxpayers must continue submitting monthly returns through the e Filing system and annual income tax returns via ToL e Filing. Small taxpayers are still required to file according to the form, timeline, and procedures set by the tax administration or through the GDT Tax Filing App. Businesses must also maintain proper accounting records and documentation in line with existing tax regulations.
How Serious Is the Tourism Slowdown?
The renewed tax incentives follow a noticeable drop in tourist arrivals. According to the Ministry of Tourism, Cambodia welcomed more than 5.5 million international visitors last year, marking a 16.9 percent decrease from the 6.7 million recorded in 2024. The decline is even more visible in Siem Reap, home to the iconic Angkor Wat. In January 2026 alone, international visits to Angkor Wat fell by about 36 percent year on year, with around 93,000 foreign tourists generating just over 4.5 million dollars in revenue.
Market data from Oudom Consulting further highlights the economic impact. A reduction of between 200,000 and 220,000 international visits in the second half of 2025 translated into an estimated 7 million to 10 million dollars in lost ticket revenue. More significantly, that shortfall may have triggered between 200 million and 350 million dollars in downstream economic losses for Siem Reap city during the same period. This shows how closely tourism performance is tied to the broader local economy, from transport operators to restaurants and retail businesses.
Should the Tax Incentives Extend Beyond Siem Reap?
Industry leaders have welcomed the government’s initiative but argue that the challenges are not limited to one province. Thourn Sinan, Chairman of IMCT Co Ltd and Pacific Asia Travel Association Cambodia Chapter, pointed to several factors behind the downturn, including border tensions with Thailand, wider geopolitical uncertainty, and concerns about online scams that have led some visitors to cancel their trips.
“It is not very bad, even if the numbers have not increased as much as we hoped,” he said. While acknowledging the value of the tax exemption, he urged authorities to broaden the scope of support. “I request the government to expand its understanding [providing tax incentives] beyond Siem Reap to include Phnom Penh and other provinces, as its impact is nationwide. It’s not only in Siem Reap, so it [measure] should be further expanded,” he said.
Steve Lidgey, General Manager at Travel Asia a la carte, echoed similar concerns. He noted that the tourism economy remains fragile and has yet to fully recover from Covid. “Western markets are mostly improving, though the conflict last year meant we lost bookings,” he said. He agreed that the tax exemption “does help” but stressed that many travel agencies are registered in Phnom Penh even if their tours operate mainly in Siem Reap. “Many travel agencies are based in the capital, regardless of where the tours are happening, which is by far the most in Siem Reap,” he said.
Is Tax Relief Enough to Revive Tourism?
While tax breaks provide short term relief, industry players believe stronger marketing and product diversification are equally important. Sinan argued that Cambodia needs a more aggressive destination campaign, especially to promote safety and rebuild international confidence. “If we don’t start the destination campaign, we won’t go further. If we compare with other nations in the world, our current promotion is behind. For example, many Chinese tourists are still unfamiliar with Cambodia because our promotion is limited,” he said. “This requires a significant increase in tourism marketing.”
Lidgey also called for broader tourism development. He suggested improving corporate facilities for meetings and events and investing in family attractions such as quality water parks and entertainment venues to reduce the impact of the low season, sometimes rebranded as the green season.
It is worth noting that on August 23, 2024, Prime Minister Hun Manet previously announced a tourism tax exemption that was extended until the end of June 2025, highlighting the government’s ongoing efforts to stabilise the sector.
Conclusion
Cambodia’s renewed tax exemptions for Siem Reap tourism businesses reflect a clear effort to cushion the industry against falling visitor numbers. While the incentives provide immediate financial relief, experts agree that recovery will require more than tax support. Expanding the policy nationwide, strengthening destination marketing, and diversifying tourism products may prove essential to restoring confidence and driving sustainable growth across the Kingdom’s tourism economy.