On April 10, 2020, the Laos government issued tax relief measures to mitigate the economic impact of the COVID-19 outbreak.
These measures specifically relate to income tax exemptions for certain businesses and employees with the Lao economy expected to slow to 6.1 percent, compared to the 6.5 percent predicted for this year.
Despite the country recording only 19 infections as of April 14, the economy has experienced negative spillovers from the impact of the virus on the region. The tourism, construction, and manufacturing sectors have been hit hardest.
These measures are designed to assist the cashflow of businesses, in particular, micro-enterprises, in addition to encouraging businesses to retain employees. Investors should seek the assistance of registered tax advisors to better understand how they can benefit from these relief measures.
What are the measures?
Micro enterprises are exempted from paying income tax for three months from April, May, and June 2020. Micro enterprises are classified as businesses with one to three employees with micro and small businesses (MSMEs) playing an important role in Laos’ economy.
MSMEs account for more than 90 percent of registered firms in the country, with the agriculture sector encompassing the largest portion (more than 70 percent). In recent years, the government has enacted policies to enable access to finance and boost production.
Businesses that have already made prepayments of income tax for those stated months can carry the payments forward to be used as deductions for the following months.
Read the full article at ASEAN Briefing: https://www.aseanbriefing.com/news/laos-issues-tax-relief-measures-mitigate-covid-19-impact/