An order issued by the Minister of Finance relating to the payment of Valued Added Tax (VAT) at border crossings has not yet been put into practice despite coming into force on the day of issue
Deputy Prime Minister and Minister of Finance Mr. Somdy Duangdy issued the order on August 30. The ruling stipulates that each person entering Laos must pay VAT equivalent to 10 percent of the value of goods they bring with them, where the total value of the goods exceeds US$50.
But the order has yet to be adopted by the Customs Department, which has been tasked to implement payment of the tax.
In an interview with Vientiane Times on Friday, Acting Director General of the Customs Department, Mr. Bounpaseuth Sikounlabout, said the department was currently preparing to put the order into force and instructions on the process had been drafted.
Preparations also include readying facilities where the payments would be made and the necessary IT to carry it out, which he said would ensure payments could be made swiftly.
We, in cooperation with BCEL, are developing a system for the tax payments so that people can declare the value of their goods and pay the tax using their smartphone, Mr. Bounpaseuth said.
Separate lanes for bus passengers, travellers using private vehicles, and people who have nothing to declare will be set up at the country’s main border crossings.
Mr. Bounpaseuth said VAT payments at borders would begin early next month and the process would undergo a couple of trial runs to check that it was successful.
Clarifying the amount of VAT to be paid, Mr. Bounpaseuth said that if a person entered the country with a newly purchased television worth US$150, for example, the amount owed would be US$10 (10 percent of US$100 after the deduction of the first US$50).
The tax on imported goods is calculated based on the price paid in the country of purchase, with any VAT tax paid in that country excluded from their value.
Mr. Bounpaseuth said a tax of 10 percent would not be a significant burden on consumers and would make people aware of their tax obligations to the state.
The tax would be levied at the most frequently crossed borders, with the Lao-Thai Friendship Bridge in Vientiane as the main target.
Source: Vientiane Times