Revenue collected over the past 10 months of the 2015-16 fiscal year has accomplished only 74.52 percent of the set annual plan approved by the National Assembly, according to financial officials.The revenue shortfall has further escalated budgetary tensions, creating greater concerns for the government to seek more funding to meet expenditure needs.
Economists worried that the failure to collect the revenue could affect economic growth and national development in Laos in the near future.
Deputy Prime Minister and Minister of Finance Mr. Somdy Duangdy addressed a budgetary meeting being held in Vientiane from August 17-19.
“Our revenue collection over the past 10 months has failed to attain the target so our financial sector will need to work harder in strictly enforcing our existing measures to increase revenue collection for the rest of the year,” Mr. Somdy said.
“It’s very urgent for us now to enhance our responsibilities and pay a greater attention in addressing loopholes and problems occurring in personnel cadres.”
Mr. Somdy reiterated that revenue collection and budgetary management must be made in a transparent and accountable manner.
The Ministry of Finance will continue to push for business units and state sectors which failed to pay their obligations to the national budget in the past months to do their duty for the rest of the year.
The Ministry of Finance is committed to work with the Bank of the Lao PDR to source funding to respond to budget expenditure needs which can be made through loans or issuing bonds as a way to maintain the country’s financial liquidity.
The main challenge for Laos is that the demand for budget expenditure is higher than the capacity of the country to source revenues for development needs.
Mr. Somdy reaffirmed the government would attach great importance to paying officials’ salaries and external debts and strictly pursuing financial principles to ensure all expenses are covered based on the set plans.
Laos has faced a revenue shortfall for the past three years linked to several factors including falling commodity prices, especially of minerals and oil. Secondly, there are loopholes in revenue collection that need to be addressed.
In April this year, the National Assembly (NA) approved the government’s proposal to reduce the 2015-16 fiscal year budget after the country’s failure to collect sufficient revenue in the previous months.
As a result of the budget adjustment, the plan for revenue collection this fiscal year was adjusted down from 26.159 trillion kip to 23.7 trillion kip and budget expenditure from 31.946 trillion kip to 31.118 trillion kip.
A senior economist from the National Economic Research Institute, DrLeeberLeebouapao commented that economic growth in Laos was expected to reach only 6.9 percent this year, which is lower than the target set for 7.5 percent annually from now until 2020.
Source: Vientiane Times