To mitigate and assist businesses that are affected by the COVID-19 outbreak, the Prime Minister has issued Decision No, 31/PM, dated 2 April 2020) on Policies and Measures to Mitigate Impact from COVID-19 to the Lao Economy. The Decision provides for policies, measures and instructions for implementation.
We provide below a brief summary of the key take away points from Decision No. 31:
- An exemption from personal income tax for employees (both State and private) with income with salaries of LAK 5 million and below for a period of three months (from April to June 2020);
- An exemption from income tax for micro enterprises (enterprises with annual business incomes of less than LAK 400 million) as provided in the Income Tax Law for three months (from April to June 2020);
- An exemption from import duties, taxes and other fees on the import of all goods for use in the prevention and preparation for prevention of COVID-19, including masks, hand sanitizers, medical equipment and other necessary items. A list of imported goods requiring exemptions from import duties, taxes and fees will be determined by the Ministry of Industry and Commerce in cooperation with the Ministry of Public Health;
- A postponement of the payment of taxes businesses in the tourism sector for three months starting from April 2020;
- An extension of the filing deadline for the financial statements for enterprises and companies from 31 March 2020 to 30 April 2020;
- An extension of the payment of road fees from 31 March 2020 to 30 June 2020;
- A study will be undertaken by the Government to reduce the price of electricity and water supply, and extend the payment for households and businesses;
- The Bank of Lao PDR will implement a reduction of interest rates and the compulsory reserve of commercial banks as appropriate;
- The Bank of Lao PDR will requests commercial banks to provide a credit policy to resolve the impact of COVID-19, this can include postponing repayments of principal and interest on loans, the reduction of interest rates, providing new loans to businesses, loan restructuring, loan reclassification and others measures; and
- A postponement of the mandatory social security contribution of affected businesses for three months (from April to June 2020).
As always, please stay safe and let us know if you have any questions or queries with any of the above.
We will continue to provide regular updates on the latest tax relief and measures relating to COVID-19 in the Lao PDR.
The information provided here is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.
Partner & Head of Regional Tax Practice