Laos traders dodge customs duty at lax borders

Vientiane: Many traders are using the shortcomings of smaller, informal border crossings to avoid paying customs duty on goods purchased in other countries, an official has admitted.

Because the authorities do not have the resources to check all the goods arriving at these border crossings, people can often sneak past customs officials without inspection.

Shoppers are charged tax on their purchases if the total value amounts to 500,000 kip (RM250) or more.

If these informal border checkpoints were better staffed and used modern equipment, the state would be able to collect more tax.

Prime Minister Thongloun Sisoulith advised Champassak provincial authorities to do more to tackle illegal trade when he visited the province last week.

Director of the provinces Commerce and Industry Department, Sombat Senphansong, said Champassak shared two informal border crossings with Thailand. In the past, people had been able to take goods through these checkpoints without paying tax.

But things have changed since officials decided to step up inspections of imported items.

The Customs Department of the Ministry of Finance says it will start collecting Value Added Tax (VAT) next month at the Lao-Thai Friendship Bridge between Vientiane and Thailand’s Nong Khai province.

Under the scheme, upon entry through land border crossings or international airports, Lao citizens or expats living in Laos will be charged VAT of 10% of the value of their new or used personal effects.

The tax will be waived for people who cross borders less than twice a month and bring in items worth less than US$50 (RM209).—