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Laos: Authorities fail to collect sufficient SEZ revenue

Even though Laos’ special and specific economic zones (SEZs) play a significant role in driving economic growth, revenue generated from the sector has failed to meet the set target.
Authorities planned to collect US$7.34 million through tax obligations and dividends from government share holdings in the SEZs for 2017, according to the latest report from the SEZ Promotion and Management Office under the Ministry of Planning and Investment.
Nevertheless, only US$752,194 was amassed in the first six months of this year, equal to only 10.25 percent of the yearly plan.
Several SEZs have yet to pay their tax obligations due to inefficient procedures in implementing the government’s tax-collection plans.
In addition, delays in calculating land concession fees were blamed while some zones haven’t paid dividends for government share holdings in the SEZs.
Some zones were not willing to pay the government, even though the amounts of their tax and fee obligations have been calculated.
Moreover, some SEZ authorities have gathered the revenue but have yet to pass it on to the national coffers.
The government is committed to collecting the remaining revenue of US$6.5 million for the rest of year, but to accomplish the goal relevant authorities will need to diligently follow up SEZ developers to pay their taxes and fees as part of their obligation for investing in Laos. In addition, the government plans to gather US$5.85 million for 2018 despite the revenue shortfall in the first six months of this year. Laos established special and specific economic zones in the 2002-03 fiscal year and currently there are 12 SEZ. 
About 352 Lao and overseas companies have invested in these zones with US$8 billion in total registered capital, of which US$1.6 billion has been spent, with 14,699 jobs created for foreigners and local residents. 
The SEZ have so far generated over US$17.39 million for the national budget which has been collected from land concession fees, salary taxes, profit taxes, government dividends and various other fees.  
The development of SEZ aims to attract investment from domestic and overseas private sectors as well as diversify investment in the country and generate more job opportunities for Lao people. 
The nation’s strong points include its political stability, lower cost of labour and location in the middle of major economies like China and Vietnam.

Source: http://www.vientianetimes.org.la/FreeContent/FreeConten_Authorities_233.html