Govt, entrepreneurs to improve business environment


Photo: Laos Locals Unloading products from the chinese Cargo Boat in northern laos

Illegally -imported products are still a big problem for Lao producers, because domestic goods cannot currently complete with the less expensive imported products.

A representative from the manufacturing working group that represents many Lao businesses, Mr Phouvanh Sidavong, said yesterday there are still many illegal imports – goods sold in the market that do not have to pay tax and many products that don't have a stamp. This is one reason illegal importers can sell products at lower prices than the domestic producers.

He said that this directly impacts the manufacturing groups, as they must pay taxes, so their prices are higher than the imported products and cannot compete.

He requested that the responsible section of the government recheck border crossings and markets often, to ensure that all traders selling imported products pay the appropriate taxes.

The Deputy Director of Customs Department, Mr Athsaphangthong Siphandone, said the government had now started operating under Asian Free Trade Area (AFTA) regulations, such as trying to reduce the import customs rate from 5 or lower to 0 percent, making it even cheaper to import goods from other countries.

This may be a further reason for the authorities to crack down on illegal imports, he added, noting that by next year, customs rates for most imported products will be reduce to zero percent.

This problem was discussed at a meeting yesterday at the Lao Plaza Hotel between the government sector and members of the private working groups to improve the business environment in the country.

The meeting continues today, when the discussion will be focused on the garment, wood, coffee, service and tourism industries.

In the meeting, a representative from the Lao garment association, Mr Noulack Phounmalay, also said that now many small factories that entered into sub-contracts with large factories have had to close, because they were forced to pay taxes of about 5 percent, and he wanted the government to decrease the tax rate from 5 to 3 percent.

According to the law, producers who earn income must pay a tax of between 5 and 10 percent of their net profit.

He added that there is a problem with checking products before exporting them and after receiving imported goods from other countries. Producers have to tell the tax officials to check the products and if they don't, the producers will be fined 1.2 million kip.

He said that garment products to be exported and raw materials to be imported for manufacturing in Laos are the only products not taxed, and that they need to be checked at the checkpoint and didn't check again at the factory.

Mr Athsaphangthong explained that now the checkpoints do not comprise a huge industrial warehouse for checking the huge number of products that are exported.

This means officials have to perform inspections in each factory that will export products, instead checking at one central checkpoint.

The administration and checking processes still need to be carried out even for products that will not be taxed.

This meeting was organised by International Finance Corporation's Mekong Private Sector Development Facility and the Committee for Planning and Investment.

Source: vientianetimes