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Opinion: A New Social Contract: Using Land-Value Tax to Power Basic Income in Cambodia
- Mar 25
- 5 min read
IPF
Future Forum's junior research fellow, Neth Chanmonyneath was published in The Cambodianess on March 25th, 2026. Check out the original article HERE, and read it below!
As the gap in social benefits between rich and poor continues to widen, Cambodia needs to take a hard look at how it designs social protection—making sure support is truly accessible to everyone, not just a few. With current programs constrained by limited funding and long-term sustainability concerns, one promising path is a social protection system financed through a land-value tax (LVT).
Revenue from an LVT could help fund a basic income scheme, offering much-needed financial support and a safety net for women working in the informal economy. But this raises important questions: how can the government ensure transparency and accountability in tax collection? And how can it redirect the unearned gains from rising land values to benefit those who need support the most?
Policy Problem: Unearned Land Wealth and Social Inequality
In the first quarter of 2025, land values in Phnom Penh's prime districts reached the highest rates per square meter, with Daun Penh and Boeung Keng Kang 1, largely due to rapid urban development and public investment. Nevertheless, the property tax system remains minimal, with the government collecting just 0.1 percent for the values of immovable property exceeding 100 million riels (approximately $25,000), and there are certain land properties that remain exempt or are eligible for discount conditions.
This 0.1 percent rate is extremely low compared to Singapore and Malaysia, where the property taxes are much higher and more systematically structured.
As a result, most of the increase in land values has not been captured through taxation, ultimately creating the “tax paradox” in which the small elite landowners benefit from holding land unproductively while also reaping unearned wealth generated by public investment.
On this note, while Phnom Penh’s land values skyrocket, thus enriching a few overnight, the public benefits fail to keep pace. This imbalance is evident among informal female workers who work as street food vendors, waste collectors, and domestic workers. Many of them are primary sole breadwinners within their households, who endure high income instability, lack access to safety nets, and remain highly vulnerable to both environmental and high economic shocks.
Structural gender inequalities embedded in Cambodia's land tenure system, labor market segmentation, and legal social protection system limit women's ability to financially own assets and to qualify for social insurance, despite their significant roles in sustaining the urban economy.
What is Land-Value Tax and Why It Matters
Land-Value Tax (LVT) is assessed on the full value of the land. It does not include buildings or improvements; it focuses on the land’s natural value, which rises due to the public investment, infrastructure and urban growth. Landowners are generally responsible for this tax, even if the land does not produce rental income.
In this sense, the LVT is equitable because it redistributes publicly-created land wealth from landowners to marginalized populations. The fairness of the LVT should be understood not by who bears the initial tax liability, but by how the revenues are allocated.
When properly implemented, the LVT incentivizes productive land use and reduces land speculation which can indirectly moderate rent inflation, thereby ensuring that the broader urban economy benefits as a whole. By capturing unearned gains from public investment and urban development, the revenues from LVT can be used to support much-needed social programs, particularly a basic income initiative.
This approach allows the government to allocate domestic budgets to priority programs without increasing public debt or relying on foreign aid. In doing so, the LVT provides a stable revenue source that can serve as the foundation of a self-reliant social protection system by strengthening economic security and supporting long-term inclusive development, thereby ensuring that no one is left behind.
The Need to Strengthen the Accountability in Tax Collection System
To ensure that enough revenue from a land-value tax (LVT) goes into a basic income program, the first priority is to strengthen transparency and accountability in how taxes are collected. At the same time, it’s important to address valid concerns about whether such a system would be fair and workable in practice.
One key concern is that some landowners may not earn any income from their land and may not have enough cash on hand to pay taxes based solely on its value. This is especially true when the land is held as a long-term asset rather than used to generate income, which could make meeting tax obligations difficult.
To mitigate this issue, legislative reforms should not only revise the current property tax rate from 0.1 percent to a level comparable to regional standards but also retain and clearly define exemptions or deferrals for low-income or liquidity-constrained landowners while also maintaining existing exemptions for low-value properties or agricultural lands.
Addressing this concern would require drafting amendments to existing laws that clearly define the exemption criteria, conducting the fiscal impact and equity analyses, and hosting public consultations with municipalities, landowners, and relevant stakeholders.
In addition, the effectiveness of such a mechanism depends largely on the implementation of a standardized and transparent land valuation system in Cambodia. In practice, land markets remain informal, with prices often determined through ad hoc negotiation rather than real market price benchmarks. Without reliable valuation prices, both tax liabilities and eligibility for land exemptions risk undermining compliance and public trust.
Last, strengthening this accountability would also require reinforcing the role of the General Department of Taxation (GDT)’s taxpayer digital application, available on both iOS and Android platforms. Although the application is already in place, the latest updates on property information have not been fully integrated into the application, which limits public disclosure, as well as effectiveness in ensuring tax assessment and timely revenue collection.
So, strengthening the system should focus on regularly updating it, closely monitoring and evaluating its performance, and fully integrating it with a centralized, digital land registry. This should be paired with ongoing, market-based property assessments so that land values can be kept up to date and automatically reflected in the GDT system.
How LVT Revenue is Allocated for the Basic Income Initiative
Beyond cash collection and disbursement, the LVT revenue can be leveraged to support social programs to amplify the impact of the basic income initiative more effectively. These programs include: skill development and entrepreneurship support, healthcare and social services, and monitoring and evaluation impact systems.
Essentially, a portion of the fund should be invested in capacity-building support that trains women on micro-credit programs, financial literacy and business management.
Government support, combined with a solid foundation in small business management, can create a virtuous cycle for women. It helps them build skills, confidence, and resources to grow their businesses, manage finances effectively, and better withstand economic hardship. In turn, this improves their well-being, strengthens communities, and encourages more informal women workers to transition into the formal economy.
Moving Forward for Cambodia
Cambodia can draw lessons from South Korea, where, in 2022, President Lee Jae-Myung proposed funding cash-predictable transfers through a new land-holding tax as part of the Universal Basic Income campaign. The revenue from this tax was intended to provide regular payments of 250,000 won (roughly equivalent to $170 - $172) to all citizens.
Complementing this initiative, the president suggested corrective taxes that included a carbon tax and fiscal reforms and emphasized the importance of pilot programs and local initiatives to demonstrate the feasibility of the basic income programs starting from a smaller scale.
For Cambodia, these lessons emphasize the importance of designing a comprehensive land-value taxation strategy that focuses on phased pilots, revenue earmarking, integrated fiscal reforms and evidence-based scaling to create a sustainable basic income initiative supporting vulnerable informal female workers.
This strategy would not only strengthen efficiency in tax collection revenue and reduce administrative burdens, but also ensure that the budget is allocated efficiently to social benefits.
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