Lao:Financial leakages continue to drain government budget
Although the government exceeded the targets set for 2011-12, financial leakages remain significant, according to Finance Minister Phouphet Khamphounvong
Mr Phouphet revealed the information in an interview with Lao media during the annual meeting between the government and provincial governors, which began on Monday.
“We have yet to collect revenues commensurate with the tax base we have. We have found that financial leaks in our national budget are still quite large,” he said.
“In the future we will need to address these problems, particularly those related to tax and customs duty collection. We will streamline mechanisms and systems related to tax and customs collection to ensure this work is more effective.”
“We will make it easier for people to pay taxes and customs duty by allowing payments to be made through bank accounts,” Mr Phouphet said. “We need to reduce the number of people paying taxes and customs duties through officials, as this is creating a lot of shortfalls and problems at the moment.”
Domestic revenue collection reached 15,000 billion kip for the 2011-12 fiscal year, which was five percent more than the set plan, despite various internal and external factors affecting the country at the time.
The largest source of income was revenue from tax collection which was about 10 percent more than the target set by the National Assembly, followed by revenue collected from the management of various state enterprises.
“However, taxes collected from natural resources exploitation such as mining and energy are our main source of our revenue, while business taxes have not amounted to the sum anticipated,” Mr Phouphet said.
The Finance Ministry would try to identify all possible sources of revenue as it was known that there are still many potential sources of income that could bolster the national budget.
“Many people still evade paying taxes. Businesses in particular are dishonest when it comes to paying taxes. If we could collect all the money we are owed, it would swell our coffers significantly.”
“We still receive a small amount from leases and concessions on state assets, including land. We have found that this income has not appreciated.”
Regarding expenditure, the government was able to finance the country's various development needs over the past year, as well as the ASEM Summit and other important events.
The government was also able to repay debts that have been outstanding for many years, particularly monies owed by development projects.
“We repaid about 5,000 billion of our debt owing from development projects since 2001,” Mr Phoupet said.
I f foreign aid is included, national revenue exceeded 19,000 billion kip last fiscal year. Meanwhile, expenditure rose to about 23,000 billion kip.
Despite the challenges, the Lao economy continues to grow at around 8 percent annually. The government has a clear policy to attract foreign investment and generate job opportunities in an effort to remove Laos from the UN's list of least developed countries by 2020.
