Lao Govt to raise taxes on cars, lower rates on motorbikes!

The government will impose new tax rates on all vehicles within the next three months in a move to encourage more people to use motorbikes instead of cars.

The National Assembly approved the scheme last month, giving the green light for the government to lower excise taxes on motorbikes but to increase tax rates on cars as part of efforts to encourage people to use vehicles that consume less fuel.

Under the new law, which will come into practice in October, the excise tax rate on any motorbike with an engine capacity of below 110cc will drop from 20 percent to only 10 percent, while taxes on motorbikes with an 111cc or larger engine will drop from 20 to 15 percent.

People who want to buy a pickup truck with an engine capacity of between 1,501 and 2,500cc will face a 30 percent tax rate, up from 20 percent. Pickups with an engine larger than 2,500cc will be subject to a 40 percent tax, up from 20 percent.

However, the tax on pickups with an engine capacity below 1,500cc will remain unchanged at 30 percent.

The excise tax on sedans with an engine capacity below 1,500cc will increase from 65 to 70 percent, while the tax on sedans with an engine capacity between 1,201 and 1,500cc will increase from 65 to 80 percent.

A sedan with an engine capacity of 1,501 to 2,500cc will be subject to a tax rate of 85 percent, up from 65 percent, while the rate for sedans with an engine capacity above 2,501cc will increase from 75 to 90 percent.

The tax rate on SUVs with an engine capacity below 3,000cc will rise to 70 percent, while those with an engine of 3,000cc or above will be subject to an 85 percent tax.

The tax rate on vans with less than 15 seats will be 25 percent, and 20 percent for those with more than 15 seats.

Trucks with an engine size of less than 1,500cc will be subject to a 10 percent tax, while trucks with a larger engine will be taxed at 15 percent.

According to tax officials, the government's decision to lower taxes on motorbikes is aimed at helping people on low incomes to buy a vehicle and to encourage more people to use more fuel efficient forms of transport.

The number of cars in Laos has increased dramatically in recent years due to strong economic growth. The large number of cars in Vientiane results in morning and evening traffic jams, as well as hundreds of road accidents every month.

However, a number of National Assembly members have said that increasing taxes will not stop people from buying vehicles as public transport options in the major towns remain inadequate.

http://www.vientianetimes.org.la/FreeContent/free_Govt.htm

By Times Reporters 
(Latest Update July 14, 2011)