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Excise Tax On Internet Use A Barrier, Business Insists

Source: Vientiane Times

Members of the Lao business sector have recently called for the government to abolish a 10 percent excise tax on internet usage, claiming that Laos remains the only country in Asean to impose the charge.

The cost for internet usage in Laos is relatively expensive when compared to the costs of internet access as a fraction of GDP per capita regionally.

As such, the government should pay attention to promote and advocate lower costs of internet access for Lao citizens, Lao National Chamber of Commerce and Industry board member and CEO of Toh-Lao Group Ms Souphaphone Souannavong said at the 11th Lao Business Forum (LBF) in Vientiane recently.

“By doing so, the development of the information and communication technology of Laos can be significantly improved to catch up with regional peers,” she said.

She also pointed out that a recent study on the affordability and service quality of the internet in Asean published in 2015 revealed that the average cost of internet access in Laos for a basic fixed broadband package is 8 percent of GDP per capita.

“This figure is considered high compared to Laos’ neighbouring countries such as Thailand with a 0.1 percent and Vietnam with a 0.8 percent,” Ms Souphaphone said.

The Ministry of Finance’s Tax Department would be recommended to take special actions in compliance with the notification no. 1194/PMO on the abolishment of the excise tax on internet, she said.

Meanwhile, Deputy Minister of Finance Mrs Thipphakone Chanthavongsa responded to questions raised by members of the business sector on the internet excise.

She said that the Ministry of Finance is currently drafting various laws including on the excise tax on usage of the internet.

“A couple of months ago, various consultation meetings were held to formulate comments from representatives of the public and private sectors over the excise tax on internet usage,” she said.

She also said the feedback from various consultation meetings was to reduce excise tax on internet usage down from 10 percent to 5 percent then 3 percent.

“The excise tax on internet usage can be removed but the government has to ensure there are alternative revenue sources because the income from internet usage has contributed much income to the revenue collection, especially in the communication sector,” she said. Last year, the communication sector contributed more than 139 billion kip to revenue collection, and the income from excise tax on internet usage contributed a large share, Mrs Thipphakone said.

She added that the Ministry of Finance is willing to work with the private sector to seek solutions and to be ready to improve consultations in a bid to help improve the business climate in Laos.