The Ministry of Finance is committed to carrying out stronger measures to increase revenue collection for the rest of the fiscal year to offset shortfalls recorded in the first 10 months.
Deputy Minister of Finance Mr Bounchom Ubonpaseuth told Vientiane Times yesterday that one of the main measures is to encourage all 400-million-kip business units to hold bank accounts and collect value-added taxes from consumers for the government.
We have about 9,000 to 10,000 business units with turnover up to 400-million-kip which accounts for about 10 percent of the total units in Laos, he said.
We began introducing value-added taxes in 2010 so the government could further earn revenue to offset the loss from tariff reductions.
There are about 96,000 business units in Laos. However, the Ministry of Finance is examining the actual figure endeavouring to clearly identify revenue sources.
Mr Bounchom described the challenge of collecting taxes in Laos as a majority of businesses were small which required the government to collect the taxes based on negotiation and estimates.
We want to stop cash payment taxes based on negotiation and estimates, but we cannot do it because the majority of businesses in Laos are small and family businesses, he said.
Deputy Prime Minister and Minister of Finance Somdy Duangdy told a financial and budgetary meeting held in Vientiane last week that another significant measure was to address the problems that emerged in official cadres and enhance their responsibilities to serve the nation.
Those who contravene financial law and principles and who abuse their powers for their own benefits such as committing financial fraud will be removed.
The Ministry of Finance will continue to collect taxes from business units which failed to pay the government in previous months.
Critics say it’s very challenging for Laos to collect all the taxes as businesses have tried to evade payment through a number of ways including under-declaring their incomes.
Despite revenue shortfall over the past 10 months, the government is giving priority to paying officials’ salaries and disbursing the budget in an effective fashion.
The government is aware that it’s also necessary to clearly define revenue sources and to expand electronic collection methods to assist the budget.
According to the Ministry of Finance, revenue collections over the past 10 months of the 2015-16 fiscal year accomplished only 74.52 percent of the set annual plan approved by the National Assembly.
Concerning budget expenditure, the payment of officials’ salary accomplished 73.86 percent of the yearly plan and debt repayment attained 77 percent of the annual plan.
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.
Source: Vientiane Times