VAT on personal cross-border imports ordered as Laos looks to revenue slide

Nationals, cross-border travellers and residents in the South-East Asian nation of Laos are set to be charged a 10 percent value-added tax (VAT) on personally imported goods following a decision approved by the country's cabinet effective immediately, local media reported Thursday.

The levying of the tax, to come in effect immediately, will reportedly require declarations of luggage contents to customs officials for both Lao and other nationals entering the country via border crossing points and international airports, state-run media Vientiane Times reported.

Goods items being imported into Laos judged to be over a cumulative total of 50 U.S. dollars will be subject to the levying of 10 percent tax per item value, according to an order issued by the country's Deputy Prime Minister and Minister for Finance Somdy Duangdy dated Aug. 30.

Those crossing borders more than twice a month will be required to pay tax on the full value, the order stated.

The decision noted that "customs officials are given the right to assess the value of goods if their owner does not have all receipts in place, if the value is unclear or if there are no documents at all."

The move came as Laos attempts to plug revenue shortfalls and strengthen collection while grappling with an economy that sees its increasingly prosperous residents regularly cross borders to more populous and developed neighboring countries in search of more cheaply-priced and popular brand name goods. Endit