Business units encouraged to make transparent tax payments
Business units encouraged to make transparent tax payments
Business units with annual income of 400 million kip or more must hold bank accounts and move to employ electronic systems to ensure proper taxes are paid to the government.
This was the comment made by Deputy Minister of Finance Mr Sila Viengkeo on Monday, saying that if the business units hold bank accounts and use electronic systems, the value added taxes (VAT) can be levied on consumers who would directly pay taxes to the national budget.
�Our ministry is re-inspecting the business units with annual revenue of 400 million kip and encouraging them to shift to VAT payment systems,� Mr Sila said.
This scheme should be completed in the coming months, aiming to boost national income and ensuring transparency and accountability are achieved in revenue-collection activities.
There are about 96,000 business units in Laos but only 10 percent of them are reported to have an annual income of 400 million kip.
The majority of business units pay taxes to the government based on agreements that they signed with relevant authorities.
Critics say there are a lot of loopholes under this system as businesses can give bribes to authorities to pay fewer taxes.
According to the Ministry of Finance, taxes collected through electronic systems account for only 5 percent in Laos so that it's critical to expand this kind of project to boost the national budget.
Last week, Deputy Prime Minister and Minister of Finance Mr Somdy Duangdy visited northern provinces including Luang Prabang and Oudomxay to push for better revenue collection.
He called for local authorities to clearly define sources of national income to enable the country to accomplish its 2017 target for revenue collection.
Mr Somdy said the business units with an annual revenue of 400 million kip need to be registered and encouraged to use electronic systems to ensure proper taxes are paid to the government.
The local authorities have also been told to address loopholes occurring in the financial system and penalise officials involved in financial fruad.
Over the past four to five years, Laos has experienced a revenue shortfall, further escalating budgetary tensions and affecting economic growth and national development.
The revenue shortfall is linked to a lack of clear sources of revenue and loopholes in revenue collection that need to be addressed.
According to a government report, revenue collected over the past 10 months of the 2015-16 fiscal year amounted to only 15.71 trillion kip, equal to 66.5 percent of the figure stated in the annual plan approved by the National Assembly.
Budget expenditure amounted to 24.29 trillion kip, equal to 78 percent of the plan. The government expected to collect about 22.5 trillion kip for the whole fiscal year, equal to 95.17 percent of the plan.
In 2017, the government plans to collect revenue of 23.94 trillion kip and spend 32.4 trillion kip, so it is critical to clearly identify the sources of that revenue.
