Cambodia’s government has unveiled an inspiring national strategy, spanning from 2023 to 2028, aimed at nurturing and bolstering the informal economy within the country. Prime Minister Hun Manet, addressing the launch ceremony in Phnom Penh, underscored the commitment to leaving no Cambodian behind, recognizing the vital role of the informal sector in propelling sustainable economic development and its potential to alleviate poverty, enhance social fairness, and fortify the economy’s overall resilience.
This uplifting initiative is centered on five pivotal priorities:
- Facilitating Entry into the Formal System: The strategy is designed to make it easier for informal businesses to transition into the formal system, affording them legal protection and access to established markets.
- Simplifying Registration Compliance: The government intends to streamline the bureaucratic hurdles associated with registration requirements, making it more enticing for informal businesses to formalize their operations.
- Providing Social Safety Nets: The strategy places an emphasis on extending social support to individuals entering the formal system, guaranteeing access to crucial services such as healthcare and education.
- Enhancing Skills and Competence: Recognizing the importance of honing the skills of those operating in the informal sector, the strategy seeks to boost productivity and competitiveness.
- Boosting Outreach and Awareness: The government is committed to heightening awareness among informal businesses regarding the advantages of participating in the formal economy and offering the necessary guidance to facilitate this transition.
A significant portion of Cambodia’s labor force, approximately 6.2 million out of 7.9 million employed individuals, is engaged in the informal sector, operating without government oversight or tax obligations. As part of this uplifting strategy, informal businesses will be encouraged to formalize during the 2023-2028 period. Moreover, the government has magnanimously announced the waiver of all tax debts and fines incurred prior to registration, along with the provision of additional tax incentives.
Anticipated to be a transformative force, this national strategy promises to make a positive impact on the informal economy, fostering its formalization, enhancing the livelihoods of workers, and significantly contributing to Cambodia’s overall economic growth and development. Prime Minister Hun Manet encapsulates the spirit of this endeavor when he affirms, “The government views the informal sector as a driving force for our nation’s sustainable economic progress. This strategy will be an instrumental force in poverty reduction, social equity enhancement, and economic resilience strengthening.”