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Laos returns VAT to 10% March 2024

VAT rise from 7% to 10% decree signed by President

The southeast Asia state of Laos is committing increase its standard VAT rate from 7% to 10% . This would reverse the cut of January 2022 (see below).

On 19 March, the President signed a decree for the Value Added Tax rate increase, but has not specificed details regarding the implementation date of the proposed increase, pending approval from various sectors of the Lao government. The tax authorities are expected to confirm implementation date shortly.

“The decree is currently awaiting a record letter from the Lao National Assembly. Following this, the Department of Taxation will also seek a letter of record from the Ministry of Justice,” a government source says. “The decree will come into effect 15 days after these approvals are obtained.”

The Ministry of Finance believes that the 2022 cut has not achieved the predicted boost to the economy post-COVID pandemic. The country’s currency has been falling on concerns about the deficit, and so the Ministry is seeking to boost government revenues next year.

1 Jan 2022 Tax cut to boost foreign investment

Laos Value Added Tax rate from 10% to 7% from 1 January 2022. The aim is to attract regional investment to help boost the economy as it emerges from the COVID-19 pandemic.

VAT deductibility will now be conditional on payments made from a Laos-resident bank account

The Law on Tax was also amended to exempt a number of supplies from VAT:

  • import and export of electricity
  • Export of minerals

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