LAO PDR

Notification to Shut Down DATA CENTER System

On 9 June 2021, the Customs Department, Ministry of Finance, issued notification No. 02533/CD.MOF informing the public that it would shut down the DATA CENTER System from 23:00 on 11 June 2021 to 6:00 on 14 June 2021 to upgrade the DATA CENTER System – ASYCUDA. This is to ensure that the tax declaration systems are up to date. It is also aimed at achieving a more efficient and effective system of collecting tax revenue and ensuring compliance with other obligations relating to  the national budget.

Below are the points to take note of.

1. From 23:00 on 11 June 2021 to 06:00 on 14 June 2021, the Customs Department updated the database system (DATA CENTER) of the ASYCUDA system. As such, the Customs Administration I-VII, international customs checkpoints was not able to use the system.


2. During the system upgrade, the Chief of management duties I-VII, chief customs international led the tax management unit, goods inspection unit. He would advise individuals, entities, organisations and service tax providers which intended to bring products through the customs border checkpoint to collect tax details in advance or post tax to document verification inspection of the actual goods. When the system had been upgraded and could be used as per normal, the remaining steps could be completed using the ASYCUDA system.


3. During the system upgrade, cash guarantees, Smart Tax vouchers for goods, perishables or degradation, agricultural products, livestock, emergency goods, and goods for national defence and security, diplomatic equipment and privileged persons could not be issued. They could only be issued after the system could be used as per normal to complete the customs declaration process in the ASYCUDA system.

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World Telecommunication and Information Society Day and Digital Economic Plan

On 17 May 2021, the Ministry of Technologies and Communications (“MTC”) announced on its website the celebration of the World Telecommunication and Information Society Day ("WTISD"). The event is celebrated every 17th of May since 1969. During the WTISD, MTC also announced that it has a digital economic plan for digital transformation as a response to the COVID-19 pandemic in Lao PDR. Such plan includes the following seven strategies: 

1. Legal framework;
2. ICT infrastructure;
3. Digital platform;
4. HR development;
5. ICT innovation;
6. Cyber security; and
7. Digital divide and other items such as e-government application and MTC activities during COVID-19.

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Instruction from MPI on the Promotion of Investment Incentives Concerning the State Land Rental and Concession Fee

On 14 May 2021, the Ministry of Planning and Investment ("MPI") issued Instruction No. 0760/MPI on the Promotion of Investment Incentives concerning the State Land Rental and Concession Fee ("Instruction"). The Instruction supplements the Law on Investment Promotion of 2016 by clarifying (i) the procedural requirements in obtaining an incentive certificate; (ii)  the general investment and activity-specific requirements; and (iii) zone categories for various districts. This Instruction applies to enterprises in Lao PDR that invest in investment promotion activities and are authorized to invest in accordance with the Law on Investment Promotion No. 14/NA dated 17 November 2016 ("Law on Investment Promotion").

Incentive Certificate

Legal entities must submit an application for an incentive certificate to the appropriate section of MPI (which will coordinate internally and with other governmental agencies, including the Ministry of Finance). If the activity of the applicant is deemed eligible and all requirements are met, the authorities will issue the incentive certificate within 30 working days. However, according to the Instruction, large investment projects that have signed a concession agreement with the Lao government, and are subject to a National Assembly resolution on incentives beyond those provided in the Law on Investment Promotion, do not have to apply for an incentive certificate.

The Instruction sets out the obligations that incentive certificate holders must comply with. Failure to rectify any breach within the prescribed time after an initial warning may result in the tax incentives being withdrawn.

Investment Requirements

The Instruction sets out two categories of investment requirements:

1. General investment requirements - All legal entities seeking investment promotion incentives shall fulfil the Horizontal Requirements in the Instructions. This includes the minimum levels of investment in the promoted sectors and minimum quotas for employment of Lao technical staff or workers, as well as the requirement to pay registered capital, fulfil tax obligations and comply with all applicable laws and regulations.


2. Specific investment requirement - There are also specific requirements that apply to 108 activities within the promoted sectors in the Law on Investment Promotion.

Zones

The Law on Investment Promotion offers different promotional incentives based on the location or "zone" of the activity, with zone 1 being remote areas with limited infrastructure, zone 2 for areas with better socio-economic infrastructure to support investment, and zone 3 for special economic zones. The Instruction clarifies the districts that fall into zone 1 and zone 2. With respect to the areas classified as zone 3 (i.e. special economic zones), they shall comply with the specific regulations such as the  Decree on Special Economic Zone.

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Presidential Decree on Administrative Case Proceedings Comes into Operation on 21 April 2021

The Presidential Decree on Administrative Case Proceedings No.001/PSD dated 19 March 2021 ("Presidential Decree") was published in the Lao Official Gazette on 6 April 2021 and came into force on 21 April 2021. The Presidential Decree is a comprehensive piece of legislation comprising 71 articles and is based on the Law on Civil Procedure 2012 and Law on People's Court 2012. 

The Presidential Decree is the first piece of legislation which applies to public organisations, civil servants, as well as organisations and local citizens involved in administrative case proceedings in Lao PDR. The Presidential Decree  also sets out the principles, rules, and measures in relation to administrative case proceedings in line with the law of Lao PDR.

The administrative case proceedings are proceedings relating to disputes the cases relating to the conflicts of administrative cases between:

• A Public organisation, civil servants and organisation, and citizens;

• A Public organisation and civil servants;

• Civil servants in the administrative positions and general civil servants;

• Two Public organisations and public organisation.

The Administrative Law Chamber of the People's Court and  Public Prosecutor's Office shall be in charge in adjudicating administrative cases. It shall oversee the proceedings which may involve litigants, third parties, witnesses, experts, interpreters, and attorneys or other legal representation, as the case may be. Events and cases that are currently under the consideration of the Administrative Law Chamber, or events or cases that occurred within the year before the coming into force of the Presidential Decree can be considered as being within the scope of the Presidential Decree.

The Presidential Decree also sets out the categories of cases or issues which the Administrative Law Chamber can adjudicate.

For issues of national secrecy, stability in the areas of defense-security and foreign relations shall not be taken into account.

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