Laos achieves key economic policy reforms: World Bank
Laos achieves key economic policy reforms: World Bank
Laos has made a number of key economic policy reforms on the road to becoming a member of the World Trade Organisation, the World Bank said this week.
The bank's East Asia and Pacific Economic Update, its mid-year economic review for the region, notes that the National Assembly has revised and approved the General Tax Law, introducing a more transparent, turnover-based presumptive tax regime for businesses with a turnover below the VAT registration threshold.
The revised law, which is expected to become effective this year, also eliminated the minimum business tax, creating a better investment and business climate to attract more local and foreign investment. This is expected to boost economic growth and create jobs.
In October 2011 the ‘one-stop service', which was stipulated in the Enterprise Law and the new Investment Promotion Law, was implemented This allows new businesses to apply for a unified business registration directly at the Ministry of Industry and Commerce, the bank says in the economic review.
The review also says reform of the Treasury zero-balance accounts has moved forward, supported by the transfer of all major large accounts at the central level and technical revenues accounts into the National Treasury's control.
Customs revenue mana-gement is also expected to benefit from the full deployment of the ASYCUDA World system currently in place at Laos's largest border checkpoint at the Lao-Thai Friendship Bridge in Vientiane. The National Assembly also passed a revised Customs Law in December 2011, which is expected to be promulgated this year.
The Ministry of Industry and Commerce has also updated the Diagnostic Trade Integration Study and its Action Matrix that lays out the framework for the next phase of trade-related reforms.
The process for acceding to the World Trade Organisation achieved a solid momentum with the conclusion of negotiations with the EU and the US. Laos needs only one vote from Ukraine before it can be accepted as a WTO member.
The Lao government is speeding up economic policy reform and hopes to become a WTO member before the Asia-Europe Meeting Summit at the end of this year. Economic policymakers believe the government can use the international conference to attract foreign investment.
Many foreign investors have encountered challenges in Laos as the country has limited access to world markets. WTO membership is expected to boost foreign investment in the country.
At present, most foreign investment comes from China, Vietnam and Thailand and is solely in the resource sector. The Lao government needs to increase foreign investment from other countries, in particular in the non resource sector, to ensure sustainable economic growth.
Laos has potential for investment in the processing of agricultural products, according to the Ministry of Planning and Investment.
vientiane times
