Construction firms face personal income tax scrutiny
Construction firms face personal income tax scrutiny
A number of construction firms in Vientiane expect to collect and pay personal income tax for their staff after the government started strictly enforcing the tax law.
Tax officials are reported to be visiting a number of construction firms in Vientiane, informing businesses in the capital that they have to pay personal income tax for their staff in accordance with the law otherwise they will face legal penalties.
The tax officials have also informed people who hire workers to build or renovate their houses will also have to pay income tax of the workers to the government.
Small and medium construction firm owners in the capital told Vientiane Times tax officials were seen enforcing the tax law more strictly, adding the tax officials wanted an accurate count of staff numbers which companies employ so they can collect tax more accurately.
“We are facing rising business operating costs as the government strictly enforces the law,” said one of the construction firm owners in Vientiane.
“We have to pay the tax otherwise we will face stiff penalties running our business.”
A senior official from Ministry of Finance, Mr Lamngeun Talamany told Vientiane Times this week the ministry is increasing efforts to implement the law so it can collect tax more precisely.
He said the ministry also plans to collect taxes from people who sell land and lottery winners in the future.
The government is facing pressure to secure funds for its expenditure programme as it is struggling to collect taxes from business. Over the first six months of this fiscal year, the Ministry of Finance was able to collect 3.267 trillion kip which is only 39 percent of the annual target.
The tax officials said the ministry will not achieve its tax collection target this fiscal year, adding that they would try their best to collect as much tax from businesses as they can.
The government promulgated the Tax Law in 2011. According to the law, Lao and foreigners who generate income in Laos will have to pay income tax on a progressive scale from 0 percent to 28 percent.
A person with income ranging from 1 to 3 million kip a month is subject to pay a tax rate of 5 percent of income. A person with income from 3 to 6 million kip a month has to pay a tax rate of 10 percent.
A person with income from 12 to 24 million a month will have to pay 20 percent in income tax while a person with income from 24 to 40 million kip a month will have to pay 25 percent income tax. A person with income of more than 40 million kip will have to pay income tax at 28 percent.
vientiane times