KPL
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.
He 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.
“The Investment Promotion Law identifies nine priority sectors eligible for tax and duty incentives to support national socio-economic development,” Mr Santiphab said. “However, a number of large-scale projects outside these priority areas — such as electricity generation, infrastructure, and other sectors of national importance — have also received exemptions, which has weakened the effectiveness of laws and regulations and led to revenue losses.”
According to data compiled by the Ministry of Finance, the government lost approximately 6 trillion kip in budget revenue over the past five years from import-related investment projects alone — a preliminary figure that excludes domestic tax exemptions, which are believed to amount to a significant additional loss.
To improve oversight, the Ministry is developing a system to analyse revenue losses from tax and duty exemptions to ensure greater transparency and accountability in the future.
Mr Santiphab proposed the establishment of a national committee to research and define unified standards and principles for granting tax and duty incentives across all sectors, especially for large-scale projects in energy, infrastructure, and mining. He stressed that the Ministry of Finance should be involved from the outset in evaluating the economic, technical, and financial aspects of investment projects and in defining tax and duty obligations in concession agreements.
He also urged the National Assembly to continue monitoring and re-evaluating past resolutions, and to assist the government in ensuring all proposals comply with legal provisions. Additionally, he called for closer coordination with the Ministry of Industry and Commerce in issuing Tax Identification Numbers (TINs) for priority investment projects to ensure that incentives are properly applied and that imported materials are not diverted for unauthorized use.
KPL
