Laos raises excise tax to limit outflow of foreign currency

Trucks loaded with goods for export (Photo: vientianetimes.org.la)

Vientiane - Lao President Thongloun Sisoulith has issued a decree that imposes higher excise tax on certain goods, aimed at curbing the import of luxury items in a bid to reduce the outflow of foreign currency.

Specifically, the Presidential Decree No. 003, issued on October 9, raises the excise tax on jeeps and sedans that use fuel, alcoholic beverages, tobacco, soft drinks and slot machines, gaming machines, and all types of gambling equipment that has a valid licence.

The new excise rates for fuel-powered jeeps and sedans have been set according to engine size, as follows: 31 per cent for vehicles with an engine capacity of up to 1,000cc; 41 per cent for a capacity of 1,001-1,600cc; 56 per cent for 1,601-2,000cc; 66 per cent for 2,001-2,500cc; 82 per cent for 2,501-3,000cc; 127 per cent for 3,001-4,000cc; 200 per cent for 4,001-5,000cc; and 220 per cent for more than 5,000cc.

The previous rates were 25 per cent, 30 per cent, 35 per cent, 40 per cent, 45 per cent, 70 per cent, 85 per cent and 90 per cent, respectively.

Alcoholic beverages (except beer) with an alcohol content higher than 23 per cent will have the excise tax increased from 70 per cent to 110 per cent. Drinks with an alcohol content of 10-23 per cent will have the tax increased from 60 per cent to 90 per cent, and beverages that contain less than 10 per cent alcohol will have an added excise tax of 72 per cent.

The excise tax rates for beer with an alcohol content of more than 5 per cent will now be 70 per cent, while beer with an alcohol content of 0.5- 5 per cent will incur a tax of 60 per cent.

The tax on cigarettes has increased from 50 per cent to 72 per cent, and on other tobacco products from 35 per cent to 47 per cent. Processed beverages such as soft drinks and soda will see the tax increased from 5 per cent to 12 per cent while the tax on energy drinks will increase from 10 per cent to 17 per cent.

The decree also imposed a higher excise tax on slot machines, all types of gaming machines and all types of authorised gambling equipment, raising it from 35 per cent to 50 per cent.

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