The Ministry of Finance still has a difficult task in collecting revenue as per the plan approved by the National Assembly for fiscal year 2014-15, a senior government has noted.
Minister of Finance Dr Lien Thikeo was speaking to Lao media in Vientiane on Friday on the sidelines of a meeting held between cabinet members and provincial governors.
“In the past six months of the fiscal year, we’ve been able to collect 13,000 billion kip. This means that we have to collect 17,000 billion kip in the last six months of the year in response to state expenditure needs as approved by the National Assembly,” he said.
“The government has advised our sector to make every effort to collect the revenue based on the NA’s approval. I think that in the last six months, it’s an enormous challenge for us to fulfil this goal.”
Minister of Finance Dr Lien Thikeo.
Dr Lien attributed the country’s shortfall over the past six months to a number of factors including the drop in prices of mining commodities on the world market.
Mining royalties are a major source of Lao revenue, followed by taxes collected from construction companies and other business enterprises. The falling price of commodities has adversely affected the country’s revenue.
Dr Lien said currently there was not a major source to replace the loss of revenue as a result of falling mineral prices, saying that hydropower would play a significant role in the country’s revenue for the next four or five years after mega hydropower projects were complete.
Other factors were related to the fact that many companies (both small and large) tried to avoid paying tax to the government by various means. Another factor was financial leakage in revenue collection and if not addressed could inflict greater damage upon the nation.
Dr Lien said the government was working to deal with these problems and warned that companies who failed to pay tax would face legal action.
Dr Lien also added that the economic and financial difficulty affecting Laos was only temporary. “We will overcome it in the next one or two years,” he said.
Dr Lien said a budget deficit had occurred in Laos for years and revenue shortfall had also taken place for years, resulting in delays in the payment of State employees’ salaries. The shortfall had also impacted on budget expenditure, notably in development projects.
In the 2013-2014 fiscal year, the revenue collection failed to meet the amended target despite cuts being made to the original budget plan.
Over the fiscal year, total revenue collection reached 23.544 trillion kip which represented only 96.72 percent of the amended budget plan. Of the total revenue collected, domestic revenue collection reached 18.346 trillion kip or 95 percent of the amended plan.
Dr Lien said his ministry had concentrated on installing an electronic system to collect tariffs at various immigration border checkpoints. The electronic system aimed to ensure transparency and the prevention of financial leaks.
Source: Vientiane Times