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IFC, Lao’s Tax Department Help Smaller Businesses Prepare for Changes Aimed at Simplifying Taxation

Vientiane, Lao PDR, June 18, 2014 —IFC, a member of the World Bank Group, and the Tax Department of Lao People’s Democratic Republic are preparing small and medium enterprises for new regulations that aim to improve their accounting and invoicing practices as well as enable them to assess and file their tax returns more easily. Simplified taxation will support the growth of businesses and create jobs in the country.
Today, 80 small and medium enterprises from the manufacturing, services, and trade sectors attended the first workshop organized by IFC and the Lao Tax Department to explain the new regulations and gather feedback from the private sector.
“As a small business owner, it’s very important for me to understand any changes to the tax system,” said
Keovisouk Dalasane, owner or Keovisouk Business in Vientiane. “We hope the new system will improve the transparency of the tax rules and make it easier for us to pay taxes. We need help with improving our bookkeeping and accounting.”
As part of the General Tax Law introduced by the Lao government in 2012, the new regulations aim to simplify tax-filing procedures for small and medium enterprises with annual turnover of more than $6,250. Small businesses will be assessed under a less administratively cumbersome presumptive tax system, which calculates tax liability based on annual turnover and according to standardized tax rates.
“Changes to the tax filing system will simplify the administrative procedures for smaller businesses to file taxes,” said Khamphenh Bouphavong, Director of the Legal Division of Lao PDR’s Tax Department. “Businesses can tell us what works and what needs to be improved upon, which will help us fast track the rollout of the new taxation system.”
Since 1998, IFC has been helping the Lao government improve infrastructure, streamline business start-up procedures, and simplify its tax regime in order to make the country a better investment destination.
“We have been making significant progress on tax reform in Lao PDR,” said Phongsavanh Phomkong, Head of IFC’s Office in Lao PDR. “We would like the latest consultation with the private sector to be as inclusive and participatory as possible. We want to make sure all stakeholders are well-informed.”
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. Working with private enterprises in more than 100 countries, we use our capital, expertise, and influence to help eliminate extreme poverty and promote shared prosperity. In FY13, our investments climbed to an all-time high of nearly $25 billion, leveraging the power of the private sector to create jobs and tackle the world’s most pressing development challenges. For more information, visit www.ifc.org .
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