Source: Vientiane Times
Laos will not be able to achieve the target for tax collections this year due to the Covid-19 crisis and the implementation of the adjusted new tax law.
This year, the government, particularly the Tax Department, planned to collect a total of 13,950 billion kip as taxes, amounting to around 7.8 percent of GDP, but authorities now expect to receive about 9,682 billion kip, or around 69.7 percent of the annual plan, tax officials reported at a meeting in Vientiane on Monday.
As of May 20, the department has collected taxes worth 2,877 billion kip or 20.63 percent of the annual target, a drop of 1,407 billion kip or about 32.85 percent when compared to figures for the same period last year.
Out of the total of 2,877 billion kip, central (Vientiane) authorities collected 1,578 billion kip or 18.54 percent of the annual plan, a decline of 1,097 billion kip or 41 percent when compared to the same period of last year. Local authorities collected 1,299 billion kip or 23.89 percent of the annual plan, a decrease of 309 billion kip or 19.25 percent when compared to the same period of last year.
However, the department expects that a total of 3,587 billion kip or 56.81 percent of the plan for the first six months of 2020 will be collected in the first six months of this year.
Out of this amount of 3,587 billion kip, the central authorities expect to collect 1,901 billion kip or 23 percent of the annual plan, a decrease of 1,248 billion kip or 40 percent compared to the same period of last year. Local authorities expect to collect 1,686 billion kip or 30 percent of the annual plan, a drop of 405 billion kip or 19 percent compared to the same period of last year .
The major reasons for the decrease in tax collection this year include the Covid-19 outbreak. The government issued various measures to prevent and control the Coronavirus, which also impacted businesses such as airlines, tourist agencies and tour operators, hotels, restaurants and factories.
The implementation of the adjusted new tax law, which begin this year, also impact revenues from some types of taxes, especially the profit tax that was adjusted from 24 percent to 20 percent a year, the allowed tax that was reduced from four times a year to two times, and income tax on salaries.
The collection of excise tax from telecommunication firms was adjusted from 10 percent to five percent, while the internet fee was cut from 10 percent to three percent.