VAT to Be Levied at Border Crossings, Effective Immediately


All people who enter Laos bringing with them goods items valued at over US$50 will have to pay 10 percent of the goods value to the government as Value-Added-Tax(VAT), with the decision already in force.This is in line with an order by the Deputy Prime Minister and Minister of Finance Mr. Somdy Duangdy dated August 30, 2016, which comes into force from the date of its issuance.

Through this decision, the minister has tasked the customs sector to implement the levy on all Lao and foreign passengers entering the country via border crossing points and international airports, while all citizens are required to declare their luggage to customs officials.

The decision clarifies that the exemption up to US$50 valued goods will be realised for those who make not more than two cross border trips per month, bringing non-commercial purpose items or goods for daily household consumption.

An official from the Taxation Department explained that if a traveler had a TV set valued at US$150 with him entering the country, he would have to pay US$10 (ten percent of the US$100 in excess of the US$50 exemption) as VAT. However, this policy will not be offered for frequent cross-border travelers and they will have to pay ten percent of the total value of their goods with no exemptions, according to the decision. This decision also clarified that the levy on imported goods items is calculated based on their price in the country where they were purchased, with any VAT tax paid in that country excluded from their value.

The decision noted that customs officials are given the right to assess the value of goods if their owner does not have all receipts in place, if the value is unclear or if there are no documents at all. According to the decision, the duty is given to the Customs Department to prioritise border customs checkpoints in regards to the implementation of the decision, as well as issue technical instructions in detail on the procedures, methods, design declaration forms, and the tax hand-over mechanisms.

The department is also given the duty to disseminate the decision and instruction to civil servants, customs officials, individuals, legal entities or organisations, as well as manage, inspect and report to the minister about the decision’s implementation. The decision has been issued pursuant the Law on Customs promulgated since 2011 and the amendment of some articles in the law in 2014, the Law on Value-Added Tax 2014, the Prime Minister’s Decree No.80 dated February 28, 2007 on the Ministry of Finance’s organisation and activities, and the agreement of the government’s economic team at its meeting held last month on this matter.

Source: Vientiane Times