Deputy Minister of Finance Mr Soulivath Souvannachoumkham (second right), Officer-in-Charge at the Asian Development Bank (ADB) Laos Resident Mission Mr Amr Qari (second left), and other senior ministry officials press a button to launch the Domestic Resource Mobilisation Modernisation Project on Wednesday.

Laos launches US$25 million tax modernisation project with ADB backing

The Lao government in partnership with the Asian Development Bank (ADB) on Wednesday officially launched the Domestic Resource Mobilisation Modernisation Project.
This landmark initiative aims to strengthen Laos’ fiscal capacity and economic resilience through far-reaching reforms in tax administration and domestic revenue collection.
At the launch event, government officials, development partners, and stakeholders convened to mark the beginning of this transformative programme.
Supported by US$25 million in financing from ADB, the project is designed to enhance the efficiency, transparency, and effectiveness of tax systems, and address macroeconomic vulnerabilities that threaten the country’s sustainable development.
Speaking at the launch ceremony, Deputy Minister of Finance Mr Soulivath Souvannachoumkham said Laos has experienced continuous economic growth over the past decade, leading to significant structural changes in the economy.
“While we have met our revenue collection targets in recent years, we continue to face challenges in ensuring economic stability, enhancing revenue, and managing public debt effectively,” he said.
“To overcome these challenges and build long-term resilience, an effective Domestic Resource Mobilisation mechanism is essential. It will help reduce our reliance on external funding sources and strengthen our economic foundation.”
Laos has achieved strong economic growth over the past decade, averaging 6.2 percent annually since 2010.
However, much of this growth has been driven by capital-intensive, resource-based sectors, often financed through external borrowing.
Tax revenues remain among the lowest in the region, accounting for only 11.1 percent of GDP in 2022. These challenges underscore the urgent need for robust domestic resource mobilisation to ensure fiscal sustainability and reduce reliance on external debt.
Key components of the project include the implementation of the Tax Revenue Information System (TaxRIS) – a modern digital platform for online taxpayer registration, return filing, payments, and VAT refunds, aimed at improving compliance and reducing administrative burdens.
Secondly, the initiative will focus on the development of Uniform Tax Accounting and E-Invoicing Systems. Tailored to micro, small, and medium-sized enterprises (MSMEs), these systems will streamline tax compliance, promote formalisation, and broaden the tax base.
In addition, it will prioritise the strengthening of Data Analytics for Evidence-Based Policymaking. A dedicated unit within the Tax Department will utilise taxpayer data to improve risk assessments and policy design, incorporating sex-disaggregated data to support gender-sensitive tax policies.
Lastly, it will establish a national tax academy. The academy will serve as a centre for training tax officials, with a strong emphasis on technical proficiency and gender-responsive tax administration.
By project completion, Laos aims to increase tax revenue to at least 14 percent of GDP and raise the proportion of businesses registered with tax identification numbers to 75 percent.
These reforms are expected to enhance public service delivery, support debt reduction, and create a more equitable and sustainable economic framework.
The Domestic Resource Mobilisation Modernisation Project is designed to optimise revenue collection through digital solutions such as e-invoicing, and enhance tax administration by building the capacity of tax officials.
The Project represents a significant step forward in Laos’ development journey, reaffirming the government’s commitment to fiscal reform, digital innovation, and inclusive growth.

By Bounfaeng Phaymanivong
 (Latest Update May 15, 2025)