Rajah & Tann Regional Round-Up
your snapshot of key legal developments in Asia
 Issue 1 - Jan/Feb/Mar 2018
 

Industry and Commerce Office Issues Notification on the Implementation of the Decree on Petroleum Business

On 9 March 2018, the Industry and Commerce Office of the Ministry of Industry and Commerce ("MOIC") issued Notification No. 0529/PDO.DTD/Cabinet/MOIC ("Notification") on the implementation of a decree on Petroleum Business for the Lao Petroleum and Gas Association in Lao PDR and the Directors of Petroleum Business Operation. Through the Notification, Decree on Petroleum Business Activity No. 331/PM, dated 27 October 2017 ("Decree") was officially promulgated. The Decree applies to the Petroleum Import and Export companies, Domestic Sale-Distribution companies, gas stations and similar companies. The key provisions of the Decree include:
  • Businesses that are registered and operating under Regulation No. 1785/IC.DTD, dated 7 September 2009 ("Regulation No. 1785/IC.DTD") need to expressly state that they will continue operating as Petroleum Import and Export companies, Domestic Sale-Distribution companies, or companies engaged in the rental of petroleum warehouse and petroleum transportation services. If there are any changes to their businesses, the relevant companies must propose to amend their business certificates with the Business Registrars of MOIC under Law on Enterprise No. 46/NA, dated 26 December 2013, Investment Promotion Law No. 14/NA, dated 17 November 2016 and the Decree.
  • Companies commencing a petroleum distribution business in 2018 are given 6 months to carry out the plan of petroleum distribution in accordance with Regulation No. 1785/IC.DTD. The petroleum distribution plan shall be confirmed at the end of the 6-month period if it is determined that they have complied with the standard condition set out in the Decree.

The Law on Protection of Manufacturers Affected by Goods Importation No. 27/NA, dated 30 October 2017 Enters into Force in March

The Lao National Assembly ("LNA") issued the Law on Protection of Manufacturers Affected by Goods Importation ("Applicable Law") and has adopted the resolution of such Applicable Law No. 059/NA, dated 30 October 2017. Subsequently, it issued the Decree of the President of Lao PDR on the Promulgation of the Applicable Law No. 287/POR, dated 7 December 2017, which came into operation in March 2018. The Applicable Law seeks to protect the local manufacturing sector from the rapid rise of importation of goods and products into the market. The measures set out in the Applicable Law include the imposition of tariffs and quotas on imported products to reduce the strain on Lao manufacturers that are struggling to survive the growing competition brought about by goods importation.

Lao Government Issues Decree on Labor Dispute Resolution

The Government of Lao PDR has issued Decree on Labor Dispute Resolution No. 76/GO, dated 28 February 2018 (“Decree”). The Decree sets out rules and procedures to settle labor disputes in an effective manner. It aims to protect the rights and interests of both the employers and employees.

The Decree came into operation after 15 days from the time it was published on Lao’s Official Gazette.  The Decree was published on the Official Gazette on 14 March 2018.

Tax Department Issues Regulation on New Excise Tax Rates for 2018

The Tax Department of the Ministry of Finance has issued Regulation No. 169/TD dated 11 January 2018 on implementing new excise tax rates on fuel, alcohol, tobacco and certain types of services for 2018. The excise tax on super grade gasoline has risen from 35 percent to 39 percent. The excise tax rates on regular gasoline and diesel have also been raised to 34 percent and 24 percent, up from 30 percent and 20 percent, respectively.

In addition to the excise tax adjustment on fuels, the Government also imposed a new tax rate of 45 percent on alcoholic beverages (containing 20° of alcohol or lower) and cigarettes.  Entertainment venues such as nightclubs (dancing halls), discotheques and karaoke bars have also been subject to the excise tax change.

The new tax rates are as follows:

No.

General Goods

Comparative Rate


 

1

Fuels:

  • Super
  • Gasoline
  • Diesel
  • Kerosene (for airplane)
  • Lubricant, hydraulic, grease, break oil

January 2018 onwards:

  • 39%
  • 34%
  • 24%
  • 14%
  • 9%

  

2

Alcohol or alcoholic beverage:

  • Alcohol or alcoholic beverage containing 20° of alcohol and over
  • Alcohol or alcoholic beverage containing 20° of alcohol or lower

2018-2019

  • 50%

  • 45% 

  

3

Tobacco:

  • Cigar
  • Cigarette or pack of cigarette
  • Instant tobacco   

2018-2019

  • 45%
  • 45%
  • 25%

 

Services

 

  

4

Entertainment:

  • Dancing hall
  • Discotheque
  • Karaoke

2018-2019

            20%

 



Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice.

 

Rajah & Tann (Laos) Co., Ltd
Anou Village,
Samsenthai Road Unit 17,
Chanthabouly District,
Vientiane Capital, Lao PDR.
http://la.rajahtannasia.com

Contacts:

Khanti Syackhaphom
Legal Advisor
D +856 21 454 239
F +856 21 285 261
khanti.syackhaphom@rajahtann.com

Desmond Wee
Director
D +65 62320474
desmond.wee@rajahtann.com

Rajah & Tann Asia is a network of legal practices based in Asia.

Member firms are independently constituted and regulated in accordance with relevant local legal requirements. Services provided by a member firm are governed by the terms of engagement between the member firm and the client.

This update is solely intended to provide general information and does not provide any advice or create any relationship, whether legally binding or otherwise. Rajah & Tann Asia and its member firms do not accept, and fully disclaim, responsibility for any loss or damage which may result from accessing or relying on this update.