(KPL) On June 24, 2025, the National Assembly of the Lao People’s Democratic Republic reviewed a revised draft of the Income Tax Law, marking a significant step toward enhancing financial governance and promoting sustainable economic development.

The discussion took place during the 9th Ordinary Session of the 9th Legislature. The session was chaired by Vice President of the National Assembly, Mr. Sommad Pholsena. Minister of Finance, Mr. Santiphab Phomvihane, presented the draft law. The proposed revisions aim to modernize the current legal framework and align it with the evolving needs of Laos’ economy.

The revised Income Tax Law is designed to close existing legal gaps, improve the effectiveness of income tax collection, and bring the tax system in line with international standards. The law has not undergone major changes since 2019. This revision is part of the government’s broader effort to support Laos' transition toward becoming an independent and self-reliant economy.

In accordance with government policy, the Ministry of Finance has established a dedicated committee to study and improve the law’s content. The amendments aim to make income tax regulations more transparent, equitable, and responsive to new sources of income, including carbon credits and non-timber forest products.

The revised law seeks to achieve several important goals. It aims to ensure efficient and timely revenue collection that aligns with Party-Government policies. It also intends to encourage more businesses to list on the stock market, which could help reduce reliance on public debt.

Additionally, the law supports micro-enterprises by encouraging them to keep proper financial records, which would improve their access to financing. It promotes the use of the banking system for payments of goods and services, which would enhance financial traceability.

The law introduces various tax incentives, including reductions in profit tax for stock-listed companies and small businesses. It also aims to enhance public understanding and compliance by providing clearer and more practical regulations.

Once promulgated, the revised Income Tax Law is expected to serve as a key legal instrument for managing national revenue. It is designed to build investor confidence by aligning Laos’ tax practices with global standards, including the implementation of a minimum profit tax for multinational corporations.

The law will promote fairness and clarity in tax collection by ensuring that income from all eligible sources contributes appropriately to the state budget. This reform will enable the government to meet its fiscal objectives more efficiently while supporting economic sectors that drive inclusive growth.

Officials, civil servants, business operators, and related stakeholders are expected to benefit from the revised law through clearer legal guidelines and improved coordination in tax enforcement.

KPL