IFC supports new simplified tax for small businesses
IFC supports new simplified tax for small businesses
The IFC, a member of the World Bank Group, is assisting Laos in regards to the implementation of tax system improvements to enable businesses to operate more efficiently and transparently.
The country's tax department is rolling out a new simplified system that makes it easier for small businesses to report on their activities.
Transparent and simplified taxation is key to supporting a stable and healthy investment climate, contributing to economic growth and poverty reduction.
Over the past few years, IFC, in partnership with the World Bank, has been advising the Lao government on developing a more business-friendly tax system, which increases efficiency for companies, especially micro, small and medium enterprises, when it comes to complying with tax requirements.
From May 23 to June 9 this year, more than 60 tax officials from Vientiane and other provinces took part in a training-of-trainers, which was co-organised by the Ministry of Finance's Tax Department and IFC to ensure correct and consistent implementation of the new tax-filing procedures.
“District tax officials must understand the new tax rules and administrative procedures and improve their taxpayer service capacity,” said Deputy Director General of the Tax Department at the Ministry of Finance, MrBounnamChounlabouddy at the opening of the training course in Vientiane.
“This training course will prepare our staff to assist small business taxpayers to comply with the new tax procedures and to implement basic accounting practices,” he noted.
The new tax system takes effect in October in Vientiane, following pilot programmes in Xaysettha district of Vientiane and LuangPrabang district of LuangPrabang province. Nationwide implementation will take place in 2017.
Meanwhile the IFC Head of Office in Laos MrPhongsavanhPhomkong noted that “The new, simplified tax procedures will improve transparency for small businesses, encouraging more of them to register for tax.”
“The IFC is committed to supporting the Lao authorities in further improving the taxation system and making it easier for entrepreneurs to pay taxes, grow their businesses and create jobs,” he added.
According to the officials, several business owners have recently expressed their opinion towards the new system and found that they are quite happy to access and use the new system.
One of the owners of a motorbike spare parts business in Xaysettha district, who asked not be named, said “I have started to maintain bookkeeping and issue invoices only now, even though I have run my business for several years.”
He said that it was quite difficult at the beginning but found out later that it is helpful for better business management.
The IFC supports Laos' transition toward a market-driven economy by improving the investment climate and promoting growth through improved access to services and infrastructure.
The IFC has been active in the country since 1998 and its tax advisory programme is implemented in partnership with Switzerland's State Secretariat for Economic Affairs (SECO).
