First Quarter Revenue Collection Falls Short Of Target
The Ministry of Finance has fallen well short of the revenue collection target over the first quarter of this fiscal year, posing bigger challenges for the government to secure funding for its expenditure and investment plan.
From October to December 2013, the finance ministry was able to achieve only 12.29 percent of the annual revenue collection plan, very much lower what it earlier expected, according to a government sponsored magazine published in February by the Government Office’s Public Relations Department.
Normally, the finance ministry is supposed to achieve 25 percent of the revenue collection target over the first quarter of the year, which if achieved would have set a concrete foundation for it to achieve the 2013/2014 revenue collection target.
The government has gained approval from the Lao National Assembly to collect revenues totalling 25,261billion kip (US$3.1 billion) in the 2013/2014 fiscal year so as it can secure funding for its expenditure plan and investment projects. The government plans to spend 29,745 billion kip (US$3.7 billion) this fiscal year.
Nak Borihan, the monthly magazine which quoted a resolution of the cabinet meeting in January, also reported that the finance ministry achieved only 9.4 percent of the annual tax collection target and 22.2 percent of the annual import-export tariff collection target.
State enterprises were able to provide revenue to the finance ministry totalling only 12.97 percent of its annual target while state asset management was able to provide revenue to the ministry totalling only 3.37 p ercent of its annual target.
The Ministry of Finance said that there were many causes which contributed to its failure to achieve the revenue collection target in the first quarter of this fiscal year.
One of the major causes was that the finance ministry has no concrete measures to ensure that business people and enterprises pay taxes in accordance with the laws.
Some businesspeople did not declare their real income and profits to tax officials.
The finance ministry was still unable to obtain a list of all the enterprises existing in Laos, which is necessary to collect taxes from the firms, many of whom are not registered.
Many investment projects which have gained approval from the government to import fuels and vehicles free of taxes and import duties have taken the opportunity to offer them for sale once they are imported into the country.
The declining revenue collection is posing challenges for the government to secure funds for its 2013/2014 expenditure plan. Over the first quarter of this fiscal year, the government was able to achieve only 14.4 percent of its annual expenditure target.
The ministry was able to achieve only 17.6 percent of the annual salary payment target. At present, many state employees are complaining that they receive their salaries late every month.
To address the revenue shortage, the government has urged both the state and private sectors to spend money more economically.
The government has also urged state employees not to spend state funds to host parties during the upcoming Lao New year, which falls in the middle of April. It also urged state employees not to use state vehicles to celebrate the event.
Source: Vientiane Times