BusinessLao EconomyTax

Govt Committed To Recovering Unpaid Taxes

Sources: Vientiane Times

The government will strive to collect taxes owed by businesses after they failed to pay them during the first six months of this year, according to a government report.

Revenue shortfall has mostly been reported in connection with taxation, State property and various funds, as well as tax obligations by business units.

The government’s monthly meeting held in Vientiane late last month, which was chaired by Prime Minister Thongloun Sisoulith, called for the relevant sectors to investigate and come up with appropriate measures to recover unpaid taxes.

If these taxes can be collected from businesses this year, the government will allocate it to poverty reduction efforts and the triangle-debt-diversion disbursement initiative.

Deputy Prime Minister and Minister of Finance, Mr Somdy Duangdy, told the ongoing National Assembly recently “We need to retrieve all tax obligations and fees from concession projects and the sale of State property which have so far not been paid to the government.”

According to the Ministry of Finance, eight groups of businesses, notably those related to trading, fuel and telecommunications, told the government their profits had fallen and asked to pay fewer taxes, causing the government to lose more than 476 billion kip. Critics say many private companies have tried to avoid paying the full amount of taxes owed by hiring officials to help them in this regard, even though this is in flagrant breach of the law.

The revenue shortfall is also related to a lack of clear information regarding the sources of income and appropriate mechanisms to acquire revenue.

Additionally, many mining projects are in the process of carrying out feasibility studies and surveys and 45 hydropower projects are still under construction, with these being granted tax exemptions.

Mining used to be the country’s main source of revenue but in recent years commodity prices have plummeted, which has had a corresponding impact on Laos’ revenue.

The government called on finance officials to focus on the main sources of revenue, including taxes on imported fuel and vehicles, and imported construction and electricity equipment.

Additionally, the government intends to fast-track the introduction of electronic systems for the collection of taxes at restaurants, hotels and shopping centres in Vientiane and other large towns across the country.

Starting this month, vehicle owners are required to pay road tax through the BCEL bank. This method simplifies payment of the tax and should also enable the government to collect more money. People who fail to pay the tax this year will be fined and will not be able to pay it next year, meaning they will not have valid documents.

Critics say this system should be applied to the collection of land tax and to other sectors as it should result in the government amassing more revenue for the purposes of national development.