Participants pose for a group photo at the meeting in Vientiane.

Garment manufacturers call for VAT reforms amid growing pressure on exporters

In a bid to address growing concerns within the export-oriented garment industry, the Lao National Chamber of Commerce and Industry (LNCCI), in cooperation with the Association of the Lao Garment Industry (ALGI), the Tax Department of the Ministry of Finance, and the Vientiane Tax Office last week convened a high-level meeting to discuss the revised Value Added Tax (VAT) Law and tackle pressing operational challenges.

The meeting was co-chaired by the Vice President of the LNCCI, Dr Xaybandith Rasphone, and National Assembly member for Champasak province, President of ALGI, and Deputy Director General of the Tax Department, Ministry of Finance, Mr Souphan Vilavong.
The main aim of the meeting was to create common understanding and successful implementation of  the revised VAT Law.
It also aimed to inform participants about the terms and conditions, documentation, procedures and time-frame for requesting a VAT refund, especially VAT on imported raw materials.
This is a contentious issues for the garment industry because VAT must be paid on imported raw materials before any clothes are made, which drives up the cost of production.
Because of added burdens, some manufacturers are unable to continue operations. Combined with the labour shortage and increased tariffs in foreign markets that import Lao products, many factories have announced their intention to stop production, to the point of laying off workers and closing down either temporarily or permanently.
The meeting also discussed the payment of VAT on FOB, and CMT manufacturers were given an explanation of how and when to request a VAT refund.
In conclusion, participants agreed to compile a report to send to the Ministry of Finance and other relevant government agencies in the hope of resolving these issues, so that producers and entrepreneurs can continue to do business without having to constantly battle these obstacles and lose money.

By Times Reporters
(Latest Update October 23, 2025)