The Ministry of Finance has warned that companies that don’t pay their taxes or fail to pay the full amount owed could have their business license revoked.

Deputy Minister of Finance Mr Bounchom Ubonpaseuth told Vientiane Times yesterday that the ministry applies different approaches to tax evaders.

The first step is to issue a warning and educate business owners about their legal requirements, after which legal action may take place.

“We are aware that many companies are still failing to pay the taxes they owe to the government. This means that all the sectors involved have to work together to enforce the law,” he added.

According to the latest report from the Ministry of Finance’s Inspection Department, about 30 businesses did not pay taxes last year, but the department did not give any names.

The report said these companies falsified invoices, concealing the true extent of their revenue and partially reporting their revenue to the government so they could pay fewer taxes. 

Director General of the Inspection Department, Mr Phoxay Manphilaphanh, noted in the report that many companies were unwilling to comply with the law. Some did not keep accounts while others used advisers to draw up their reports and tax statements.

Tax evasion is a major concern in Laos and is one reason for the country’s revenue shortfall over the past four to five years.

In 2014, the Ministry of Finance ordered 66 enterprises and companies to make tax payments after they tried to evade their obligations.

Critics say one lesson learned from other countries is that the media will be asked to publish the names of companies that fail to pay taxes in order to pressurise them into doing so.

The Inspection Department also found that some officials abused their power and had embezzled government money by falsifying documents and using fake invoices. Some officials failed to transfer all the revenue collected to the national budget, causing the government to lose more than 7.4 billion kip. 

Revenue shortfall was one of the main items discussed at the government’s monthly meeting this week.

The government has urged tax officials to be dependable and conscientious when it comes to collecting taxes, as this would build transparency and better serve the nation.

The government has also urged private companies to pay all the taxes they owe, to contribute to the development of Laos.

The government is committed to employing stronger measures to ensure that more revenue is collected over the remainder of the year, to finance expenditure and boost socio-economic development.

According to a recent government report, revenue collected over the past six months of the 2015-16 fiscal year amounted to only 8.013 trillion kip, just 30.6 percent of the target for the whole year. This means government agencies must be more diligent in collecting revenue and making sure it reaches government coffers.