Residential electricity users in Laos will be exempt from the 10 percent Value-Added Tax (VAT) on monthly consumption of up to 300 kilowatt-hours (kWh) under a new notice issued by state utility Electricité du Laos (EDL) on September 14.
Households using between 0 and 300 kWh per month will not pay the 10 percent VAT normally applied to residential electricity. VAT will continue to apply to maintenance fees under existing regulations.
The exemption is part of a government subsidy policy aimed at easing electricity costs for low-income households amid continued economic pressure. It will apply nationwide from the September 2026 billing cycle, which covers August electricity consumption, through December 2029.
The measure follows earlier government efforts to use VAT policy to reduce pressure on household electricity costs.
The government previously cut the VAT rate from 10 percent to 7 percent in January 2022 as part of pandemic relief measures, before restoring it to 10 percent in March 2024.
Unlike those broader tax changes, the latest measure specifically exempts residential electricity consumption below a set threshold rather than reducing the VAT rate across the economy.
Electricity Costs Remain High
The measure comes after electricity prices recorded one of their sharpest increases in recent years.
Electricity prices were 91.5 percent higher in July than a year earlier and rose 27.6 percent from the previous month. The increase contributed to a rise in Laos’ inflation rate from 7.6 percent in July to 7.7 percent in August.
Under the government’s 2025–2029 electricity tariff roadmap, household electricity rates are scheduled to continue rising gradually through 2029 as EDL seeks to strengthen its financial position.
