Numerous Revenue Leak Loopholes Remain, Govt Told
Source: Vientiane Times
A number of loopholes remain that are resulting in leaks undermining revenue collection, members of the National Assembly (NA) told the government yesterday.
Members of parliament made the comments at a three-day meeting between the NA’s Planning, Finance and Auditing Committee and the government’s sectors in charge of economic affairs in Vientiane.
NA member for Vientiane Ms Valy Vetsaphong said many large companies did not pay the full amount of tax in accordance with their real income. The fact that many businesses pay taxes based on their income assessment leaves a loophole for them to avoid paying the full amount, she explained.
Ms Valy, who is also Vice President of the Lao National Chamber of Commerce and Industry, stressed the need to demand that businesses produce accurate accounts so taxes can be collected based on their actual income.
Parliamentary members of several provinces suggested it was not only big companies, but also small and medium enterprises, including ice and drinking water manufacturers, who failed to pay the full amount. NA members said that although these enterprises were registered by district authorities and their investment costs were huge with considerable profits, they paid unreasonably small amounts of tax.
Chairman of the NA’s Planning, Finance and Auditing Committee, Dr Vilayvong Boutdakham, who chaired the meeting, called for the government to speed up modernisation of the tax collection system to close loopholes. He cited one example where a company used to pay only about 300-400 million kip in tax each year through the income-assessment-based method, but the government was able to collect much more tax from the company in just four months after employing modern equipment to monitor its actual income.
NA members called for the finance ministry to pay more attention to collecting land taxes after learning that those collected were smaller than the potential.
An Assembly member for Xieng Khuang province called for action to investigate the issue of many businesses which she said had reserved land in the northern provinces through concession agreements without implementing projects within an appropriate time. This made the state lose money.
Members of parliament are pushing to maximise collections as the government is struggling to bring in revenue to meet the 2017 budget target. The government said it was unlikely to meet the revenue target.
Deputy Minister of Finance Dr Atsaphangthong Siphandone told the meeting that revenue collection for 2017 was expected to reach 23,489 billion kip, representing 98.1 percent of the annual target set at 23,941 billion kip.
He said various measures were being employed to maximise revenue collection including focusing on properly collecting tariffs and taxes from major sources such as imported petrol and vehicles, medium and large companies, as well as major projects such as hydropower and mining operations. Dr Atsaphangthong added that the ministry was speeding up the introduction of modern electronic equipment for revenue collection and management in more businesses.
“We are gearing up the installation of electronic point of sale equipment in various major businesses in Vientiane, particularly restaurants, hotels, and shopping malls,” he told the meeting.
Officials in charge are finalising the findings of a survey that was conducted to update potential sources in a move to comprehensively collect revenue.