TaxTransportation - Vehicles

Lao Govt To Delay Car Usage Tax

The government will delay the enforcement of an annual car usage tax and a natural resources tax, even though the National Assembly had earlier given the green light to impose the taxes.

A senior official from the Ministry of Finance’s Tax Department said yesterday the government would not be able to implement a part of the revised Tax Law, which allows the government to collect the car usage tax annually instead of as a lump sum.

“The rate of the car usage tax will be defined in a presidential decree,” said the senior tax policymaker.

The National Assembly approved the revised Tax Law at the end of last year, allowing the government to collect the car usage tax annually instead of as a lump sum after finding that vehicle importers were failing to pay the full amount of excise tax due to the high rates levied.

Policymakers said it was better to let vehicle owners pay the tax annually to help the government collect more of the revenue it was owed. The number of vehicles registered in Laos has reached more than 1 million, meaning the usage tax should be a significant source of revenue for the government.

The tax official also said the government will not impose the approved natural resource tax until it has revised the presidential decree on state service fees. He was unable to say when the revised decree would be promulgated.

He said the government expects to impose the revised profit tax and other excise tax rates in the fourth quarter of this year.

Businesses must prepare to pay the revised profit tax rate of 24 percent from August, he said, adding that the Tax Department was working on a prime ministerial decree on the implementation of the amended Tax Law, hoping to put it into practice by August.

Under the revised Tax Law, the government will set income tax at 10 percent on income gained from the sale of land, and 10 percent on lottery winnings exceeding one million kip.

Source: Vientiane Times