Vientiane: The government has lost an estimated 6 trillion kip in state revenue over the past five years due to tax and duty exemptions granted to investment projects, according to the Ministry of Finance. During the 10th Ordinary Session of the 9th Legislature of the National Assembly on November 13, 2025, Minister of Finance Mr. Santiphab Phomvihane addressed questions from Assembly members concerning the impact of exemptions and special investment policies on state revenue.
According to Lao News Agency, Mr. Santiphab explained that while such policies have played a key role in attracting domestic and foreign investment, they have also reduced fiscal income, particularly from import quotas. He highlighted that the Investment Promotion Law identifies nine priority sectors eligible for tax and duty incentives to support national socio-economic development. However, exemptions granted to large-scale projects outside these priority areas, such as those in electricity generation and infrastructure, have weakened the effectiveness of laws and regulations, leading to revenue losses.
The Ministry of Finance’s data indicates that the government lost approximately 6 trillion kip in budget revenue over the past five years from import-related investment projects alone. This figure does not account for additional losses from domestic tax exemptions. To address these issues, the Ministry is working on a system to analyze revenue losses from tax and duty exemptions with the aim of ensuring greater transparency and accountability.
Mr. Santiphab proposed the creation of a national committee to establish unified standards and principles for granting tax and duty incentives across all sectors. He emphasized the importance of involving the Ministry of Finance from the beginning in evaluating various aspects of investment projects and defining tax and duty obligations in concession agreements.
He also urged the National Assembly to monitor and re-evaluate past resolutions and to support the government in ensuring compliance with legal provisions. Furthermore, he called for closer coordination with the Ministry of Industry and Commerce in issuing Tax Identification Numbers for priority investment projects to ensure proper application of incentives and prevent unauthorized use of imported materials.