Cambodian Government Announces State Will Fully Bear VAT on Diesel and LPG to Ease Financial Burden on Citizens

The Ministry of Economy and Finance (MEF) has announced a new measure in response to rising international prices of diesel and liquefied petroleum gas (LPG) to help alleviate ease the financial burden on citizens. According to the official guideline shared on April 6, 2026, the Cambodian government will fully bear the 10 per cent value-added-tax (VAT) on the domestic supply of diesel and LPG products.

Previously, the government had reduced the VAT on diesel and LPG from 10 per cent to 4 per cent, with the state absorbing 6 per cent. The MEF instructs importers and distributors of diesel and LPG on the following points:

• Enterprises must continue to issue tax invoices to customers under the self-declaration regime, however, they must not charge the 10 per cent VAT as normal and must instead indicate that the VAT is borne by the state;
• Regular invoices without VAT included in the sale price must continue to be issued to end consumers not under the self-declaration regime;
• In the monthly online tax declaration system (e-Filing), enterprises must select the category indicating VAT is borne by the state;
• The 4 per cent and/or 10 per cent VAT paid by enterprises on the import or local purchase of diesel and LPG can be claimed as input tax credit, provided that the requisite customs declarations, tax payment receipts and supporting documents are provided. VAT treatment for other goods and services remains unchanged under existing regulations.

This measure is effective from April 1, 2026, until further notice.