The non-alcoholic beverage industry in Laos will become more competitive thanks to a new government policy, according to a leading businessman.
Lao Brewery Company (LBC) Managing Director Mr Kissana Vongsay said last week that the company welcomes the government decision to lower excise taxes on soft drink products as it believes the move will boost the ability of manufacturers to produce goods at more competitive prices.
“The amended Law on Tax has adjusted excise tax rates on soda, soft drinks and stimulant beverages to help domestic producers compete with imported goods,” he said at the LBC annual conference.
The LBC merged with the Lao Soft Drink Company recently after the shareholders of the two companies – the Lao government and Carlsberg – agreed to combine them into a single business unit.
According to the Law on Tax, which the National Assembly approved in June and is expected to be put into practice from October, the excise tax rate on domestically produced soft drinks and fruit juices will drop to 5 percent, down from the previous 10 percent. Excise tax on soda will drop from 30 percent to only 5 percent.
The excise tax rate on stimulant beverages will drop from 30 percent to only 10 percent, while the rate for mineral waters will decrease from 10 percent to 5 percent.
Mr Kissana, who is also President of the Lao National Chamber of Commerce and Industry, said that the government needs to ensure the newly amended tax law is enforced.
The lower tax rates will benefit the Lao Soft Drink Company, which holds the rights to produce the Pepsi, Seven Up and Mirinda brand beverages. It also produces Viva drinking water and Soda Evervess.
Mr Kissana urged the government to ensure taxes on imported goods are charged to ensure fair business competition in the country, adding that doing so will not only benefit domestic firms but also the government through the generation of more revenues.
He said LBC will continue to implement government policy to develop the domestic beverage producing industry, aiming not only to create new sources of revenue for the government and jobs for Lao people but also to produce goods for the Lao market.
The LBC is one of the most successful businesses in Laos. The company expects to pay about 1 trillion kip in tax to the government this year.
Earlier this year the government decided to keep the excise tax rate on beer unchanged due to fears that lowering the rate could cause an inflow of illegally imported beer from neighbouring nations.
