GovernmentLao EconomyTax

Illegal Vehicle Import Crackdown Ordered As Tax Avoidance Raises Ire

Source: Vientiane Times

The Ministry of Finance has warned that it will impose stronger legal actions against any owners of imported vehicles evading taxes and tariff payments to the government.

The two-page notice highlighted the need to resolve illegal automobiles in the country seriously and was signed by Deputy Prime Minister and Minister of Finance, Mr Somdy Duangdy on June 27.

Owners of illegitimate motorcycles and cars (with an engine less than 250cc) must come to inform authorities and pay their levy obligations, according to the notice.

They also need to provide cooperation with authorities for investigation processes regarding the source of their motor vehicles, and resolving all these cases must be made through article 89 of the law relating to tariffs.

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Nevertheless, owners of unlawful motorcycles and cars (with an engine less than 250cc) that intend to elude payment of their tax obligation, if seized or detained by authorities, will be fined at 70 percent of vehicle values based on laws related to taxes and tariffs.

If owners disagree or are unable to pay their obligations, their vehicles will be confiscated according to the law.

The Ministry of Finance’s Customs Department has been entrusted to calculate the value of taxes and tariffs to be paid by owners of vehicles in various types.

Vehicles produced in 2015 would be paid based on the rates set on that year while cars produced in 2016 and onwards will be paid based on the true cost of those automobiles.

The Customs Department and Provincial Department of Finance have been urged to enforce and monitor the implementation of the notice, ensuring decent income from this sector is collected and added to the national budget.

In fact, the government had planned to resolve the issue of illegal vehicles by December last year by encouraging those who own banned cars and trucks to pay taxes or tariffs to the national budget as a way of legalising their vehicles.

However, not many people came forward to pay the taxes, arguing that the levies were too high.
They continued negotiating with the authorities to pay lower taxes.

One of the main challenges was that those who own illegal vehicles included senior officials in public security offices and they usually claim they use these vehicles for public affairs.

Though their actions contravene the country’s laws and for this reason, authorities want to address this issue based on the instruction from the government.

As of earlier this year, owners of some 11,030 vehicles including cars and motorbikes came forward to pay tariffs, taxes and fines, generating over 177.7 billion kip.

It’s unclear how many provinces have resolved the unlawful vehicles and how many illegally imported vehicles are left to be worked out.

Authorities have announced that they will seriously resolve illicit importation of vehicles and ensure that the nation’s laws are appropriately enforced with more revenue from this sector being paid to the national budget.