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Govt to levy higher excise tax on unnecessary products

Products or services the government doesn’t promote, including alcoholic beverages, will be subject to  higher taxes if a new law on excise duties comes into force in January 2020.
In contrast, lower levies will be imposed on items such as fuel and motorcycles that the government believes are necessary for improving people’s lives.
Deputy Prime Minister and Minister of Finance, Mr Somdy Duangdy, presented a draft of the proposed law on excise duties for debate during the National Assembly’s (NA) ongoing session yesterday. He highlighted the need to enact the law to reflect the reality of the nation and to conform to international integration.
The excise duties law is derived from Part III of the tax law, in which the content was limited and not comprehensive. Nevertheless, more contents are needed to reflect the reality of the nation.
The current rates of excise duties do not promote domestic productivity, resulting in producers evading. The new law is designed to differentiate tax rates imposed on products that are necessary for people’s lives and those which will have negative impacts on people’s health and the environment. 
Under the draft law, excise tax for fuel will drop from the current rates ranging from 9 to 39 percent to 5 to 35 percent as fuel is a necessity for people. The tax charged on 110 cc motorcycles will decrease from 20 percent to five percent as a way to support low-income earners.
Levies charged for internet access will be reduced from 10 percent to three percent as the internet is essential for business operations and the daily lives of people.
The government will charge a higher excise tax for golf business operations, increasing it from 10 percent to 25 percent. The levy imposed on casinos and casino games will increase from 35 percent to 50 percent as the government does not promote gambling and wants to control this type of business. 
Unlike a sales tax, an excise duty is an indirect tax charged on the sale of a particular good or service, such as alcohol and fuel. Providers and manufacturers of the goods or services will charge the tax from the buyers and pass the payment on to the government.
The government has listed 18 items and services to be covered by the law. These include fuel, vehicles, alcoholic beverages and other extravagant products. Other services to be subject to the law include vehicle-racing, cock-fighting and horse racing.        
The NA member for Attapeu province, Mr Manyso Somounty, called for the law drafting sub-committee to detail the rates for different types of alcoholic beverages so that expensive alcohol drinks can be taxed sufficiently.
The NA member for Xieng Khuang province, Mr Vilaysouk Phimmasone, said he strongly supported the enactment of this law, and that if the law is enforced properly, it will help generate more revenue for Laos in the near future.


By Somsack Pongkhao
(Latest Update June 20, 2019)


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