Laos aims to collect 98% revenue target for 2021
Laos aims to collect 98% revenue target for 2021
In the first 10 months of this year the Lao government has collected 20.436 trillion kip ($2.0 billion) in contributions to the state budget, equal to 74 per cent of the revised target figure of 27.629 trillion kip approved by the National Assembly (NA).
Based on the amount collected so far, the Ministry of Finance is hopeful that after two more months the total revenue collected will be about 26.957 trillion kip, which equals 98 per cent of the revised target figure, Minister of Finance Bounchom Ubonpaseuth told the NA on November 1.
Most of the revenue is sourced from domestic income, taxes, tariffs and grants. To meet the target, the ministry is trying to source more income from the mining sector in the form of royalties and dividends, as well as encourage the business sector to form more partnerships with state enterprises.
The government will also seek more funding and try to reduce expenditure in order to balance the budget, Bounchom said.
Total expenditure in the first 10 months of this year amounted to 19.012 trillion kip or 60 per cent of the target of 31.583 trillion kip. Of this amount, 12.786 trillion kip or 56 per cent of the target figure came from central sources and 6.225 trillion kip or 72 per cent from local sources.
The Covid-19 pandemic has caused large numbers of businesses to cease operations, especially hotels, restaurants and some factories.
The lack of revenue from these sources has put pressure on customs officials to collect more import duty and other fees, while various provinces have collected less than 60 per cent of the target revenue figure, Bounchom said. At the same time, the profit tax paid by some large companies has fallen, especially Phu Bia Mining and the Lao Brewery Company.
Earlier this year the ministry appointed a committee to promote revenue collection and expenditure management in ministries, organisations and provinces around the country. But the Covid outbreak hindered the implementation of the committee’s plans, Bounchom said.
Another problem is that most businesses do not take part in the value-added tax (VAT) system, while some businesses do not use the system in the correct way, he added. In addition, some local government bodies still lack responsibility in the management of revenue collection, especially customs duty, service fees and other sources of revenue, and fail to obtain new sources of revenue.
Instead, they continue to collect revenue from the same sources as before, which does not yield additional financial contributions. Some finance staff at the central and local levels are still poorly informed about the use of regulations with regard to revenue collection, which results in further loss of revenue for the state, Bounchom said.
