Laos considers raising value-added tax

October 30, 2023 | 12:32

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The Lao Ministry of Finance is considering raising the value-added tax (VAT) rate to 10 per cent from 7 per cent in an effort to boost government revenue and support the national economy, local media reported.

Laos considers raising value-added tax. (Source: Vientiane Times)

Vientiane - The Lao Ministry of Finance is considering raising the value-added tax (VAT) rate to 10 per cent from 7 per cent in an effort to boost government revenue and support the national economy, local media reported.

The ministry has pointed to several factors in favour of increasing the VAT rate, including the fact that the current value has not been as effective in stimulating the economy as predicted.

The number of businesses registered under the Value Added Tax Law is currently lower than expected, and the government needs to increase revenue to reduce the budget deficit and stabilise the Lao currency kip.

A new draft legislation to increase the VAT rate is expected to be completed this year and be effective in early 2024.

In addition to raising the VAT rate, the ministry is also considering other measures to improve the tax system. These measures include speeding up the development of a mechanism to refund businesses the taxes they have paid, in place of tax exemptions. This would help to reduce the amount of government financial loss through tax exemptions while providing support to local businesses.

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By VNA

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