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Govt beefs up revenue collection

The cabinet has instructed the Ministry of Finance and other state agencies to collect at least 20 percent of total revenue targeted for 2019 by the end of this month.
Speaking at a press conference at the close of the February cabinet meeting, government spokesperson Dr Chaleun Yiapaoher said the cabinet agreed that the government must do its best to collect 25 percent of the 2019 target revenue of 26,305 billion kip (US$3 billion) by the end of the first quarter.
In the worst case scenario, at least 20 percent of this amount must be collected, he said. The cabinet’s intervention is believed to be a renewed attempt to ensure it maintains a sound financial position. At this stage, no information was available to the media about the amount of revenue collected so far this year.
A number of measures have been introduced to speed up revenue collection. The finance ministry has urged all motorists to pay their road tax before the end of this month, otherwise they face a heavy fine.  According to information posted on the finance ministry’s website, the targeted revenue amount of 26,305 billion kip this fiscal year is about 3 percent more than last year.
The main sources of the government’s revenue are taxes and customs duty. State assets, state enterprises and foreign aid will yield only a small percentage of the government’s income this year, according to the plan.
Dr Chaleun said that what the cabinet hoped to see was the modernisation of the tax collection system, adding that this would enable the government to collect more revenue. The finance ministry has partnered with commercial banks to enable people to pay taxes through banks. One of the major tax payment campaigns underway is the payment of road tax and land tax through banks.
A report shows that since the introduction of the new road tax payment system, the government has seen a 10-fold increase in revenue generated from road tax. The government has been working hard to boost revenue collection with the introduction of a modernised system. However, the biggest challenge is identifying and tapping into additional sources of revenue.
Cooperation from other sectors is also needed to ensure the government collects revenue in line with the planned target. The government has vowed to improve the business climate and make it easier for people to do business so that Laos has a broader revenue base. But this is not easy as there are many factors involved.  Business growth and a stronger working culture are perhaps some of the most influential factors encouraging the government to broaden its revenue base.

By Ekaphone Phouthonesy
(Latest Update March 8, 2019)


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