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Laos: New service fee regulation to boost SME, selected sectors
A newly-approved Presidential Decree on Service Fees is set to give a significant boost to Small and Medium Enterprises (SME) and other promoted sectors, the government spokesman has said.
The decree No 003 approved in principle last month by the government cabinet at its monthly meeting is being revised in accordance with recommendations made by cabinet’s members, DrChaleunYiapaoher told local media recently.
“The decree will avoid duplicate fee charges,” DrChaleun, who is also Minister to the Prime Minister’s Office, said.
He added that the highlight of the new regulation was to offer bigger incentives to SME by cutting service fees for the businesses in a move to promote their operations.
“The meeting agreed that fees should not be overcharged in order to stimulate them [the SME],” he said.
In addition, the Presidential Decree also seeks to promote the social and cultural sectors such as health, education, skills development and social welfare.
In this regard, the meeting agreed that service fees for primary and secondary schools should not be charged as they were previously.
“Service fees for information and technology (IT) service provision must also be charged reasonably,” DrChaleun said.
However, detailed incentives are being finalised by the relevant sectors in accordance with the meeting’s recommendations.
DrChaleun stated that once it is promulgated, the new regulation will also boost service fee collection saying that fees in some sectors will increase. However, he did not give further details as they are being finalised.
The Lao government has made an effort to introduce incentives to facilitate and promote SME and other promoted sectors.
An amended Investment Promotion Law promulgated recently has offered a variety of incentives to attract investment in both promoted sectors and hardship areas.
Businesses investing and operating in hardship communities (known as Area I), where infrastructure has not yet been developed, will enjoy favourable profit tax exemptions over 10 years, according to the amended law which was passed by the National Assembly in November last year.
Those investing in promoted sectors whose businesses are located in hardship areas will now enjoy an additional five-year exemption from profit taxes bringing the total up to a 15-year profit tax exemption.
Promoted sectors include clean and organic agriculture, crop seed production, livestock breeding, environmentally-friendly agri-product processing, handicrafts, education, human resource development, labour training, educational equipment production, modern hospitals, pharmaceutical factories, medical equipment manufacturing, and herbal treatment and production.
The law also offers incentives to promote investment into areas where infrastructure and facilities are developed and favourable (known as Area II). Investment in these areas will enjoy profit tax exemption for four years while investment in the promoted sectors will enjoy an additional three years bringing the total incentive to seven years of exemption from profit taxes among other incentives.
An official from the Ministry of Planning and Investment involved in the drafting of the amended law told Vientiane Times yesterday that, overall, the law provided more incentives compared to previous laws and should attract more investment.
Source: http://www.vientianetimes.org.la/FreeContent/FreeConten_New.html