Govt pushes for greater national revenue collection

The Ministry of Finance is pushing for greater revenue collection nationwide to achieve the income target approved by the National Assembly in June.
The ministry recently issued a notification calling on relevant authorities to implement measures to boost national revenues in the last six months of the year.
The notification, signed by Deputy Prime Minister and Minister of Finance Somdy Duangdy, highlighted the importance of modernising the e-tax payment system and enhancing transparency in the financial sector.
More business units will be instructed to move into the value-added tax system after it was found that many firms with incomes of more than 400 million kip were yet to pursue value-added tax processes.
The authorities were urged to re-inspect sources of national income to ensure proper taxes are paid to the government.    
The move comes as a result of a revenue shortfall linked to the Covid-19 pandemic and the trade war between US and China, which has had a huge impact on socio-economic development in Laos.
In June, the National Assembly approved the government’s move to adjust the budget by reducing the target for national revenues from 28.99 billion kip to 22.72 billion kip.
However, the budget deficit is projected to increase from 3.77 percent to 5.87 percent of Gross Domestic Product (GDP) since the business sector has suffered the prolonged impact of the epidemic.            
The government has seen the need to expand the e-tax payment system to all provinces and more sectors. For instance, last year, the government introduced a new tax revenue management information system (TAXRIS) in major towns of seven provinces.
As a result, income from the tax sector increased by 20 percent in the first six months of 2019, compared to the year before. The government will install the TAXRIS system in 40 districts across the country.
The government will also scrutinise investment projects which were granted tax exemption for importing equipment, materials and fuel. The move aims to address loopholes whereby some companies imported more materials than needed and then sold them in local markets.
Villagers and businesses will be encouraged to pay land taxes and fees through bank accounts and electronic systems. Earlier this week, the Ministry of Post and Telecommunications held a meeting to review tax payments and revenue collection through mobile phones. The meeting was chaired by Deputy Prime Minister Somdy Duangdy and attended by senior officials.
Mr Somdy highlighted the importance of tax payments via digital systems, and creating favourable conditions for tax-payers to fulfil their obligations. He stressed that the e-tax payment system is a tool for the government to achieve its revenue collection target.  According to the notification from the Ministry of Finance, the government will enhance its efforts to manage traditional border checkpoints to counter the smuggling of goods.

By Somsack Pongkhao
(Latest Update August 6, 2020)