Tax & Revenue

Issue of Illegally Imported Cars remains unresolved

Date: 21 February 2018; Type: Legal News; Source: Vientiane Times

The illegal import of cars continues to be a problem in Laos despite orders issued by the government last year to crack down on the issue.

To legalise illegally imported vehicles, owners are required to pay taxes or tariffs to the government at rates determined by the committee in-charge of the matter. 

The government has warned that those who fail to pay the tariffs within the deadline stated in relevant regulations will have their vehicles seized.

The owners of some 11,030 cars and motorcycles came forward to pay the tariffs, taxes and fines, generating more than 177.7 billion kip for the government.

Others argued that the levies were too high, and asked relevant authorities to lower the tax rates, claiming that they used the cars for public affairs.

It is unclear how many provinces have resolved the problem of illegally imported vehicles and how many illegal vehicles are yet to be covered by the scheme. 

Many owners are still negotiating with the authorities to pay lower taxes but the Deputy Minister of Finance, Mr Sila Viengkeo, has said that the rules cannot be revised.

"The law is the law. We cannot change the law. Vehicles owners need to pay the tax rates determined by relevant committees. Those who fail to pay their taxes will be fined or have their vehicles seized," he said. 

Responsibilities have been delegated to top leaders in the provinces and government sectors, who will take charge of addressing the problem of illegally imported cars.

In Borikhamxay province, authorities planned to resolve the issue of illegal vehicles last year but failed to do so.

Earlier this month, the Governor of Borikhamxay, Dr Kongkeo Xaysongkham, issued an order to all provincial departments and districts to act against unlawful activities, including banned vehicles.

The provincial authorities pledged to address this issue this year amidst complaints from vehicle-owners who claimed the taxes are too high.

Those who own illegal cars or trucks in Borikhamxay are mostly senior officials in public security agencies and they usually argue that they use these vehicles for public affairs.

Public security officials are those who also enforce the laws. Conversely, if senior officials in these forces fail to uphold the laws, it would be hard to address the issue, sources said.

In January last year, authorities said 5,639 illegally imported cars were impounded in fiscal year 2015-2016.  Experts estimated the country had lost some 66 billion kip in revenues during that period.

Later, the government instructed the Ministry of Finance to work with relevant departments to carry out a deeper inspection and investigation into the illegal import of vehicles.

As a result of that investigation, many more illegally imported vehicles were found, showing that vehicle import activities that went against the law were continuing in Laos despite stronger scrutiny by authorities.

Critics say Laos has lost a lot of revenues due to the illicit import of vehicles over the past few decades. These funds could have been used to support children to go to school and to counter poverty.  

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