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New Policies to Reduce the Economic Impact of the COVID-19 Pandemic

New Policies to Reduce the Economic Impact of the COVID-19 Pandemic

May 25, 2021

In order to reduce and relieve the economic impact from the second wave of the COVID-19 pandemic in the Lao PDR, the Prime Minister’s Office has issued Notice No. 532/PMO dated 20 May 2021 (the “Notice”) specifying policies for further implementation by the relevant governmental authorities.

1. Tax policies

  • Exemption from personal income tax for salary of up to LAK5 million for April to June 2021
  • Exemption from profit tax for microenterprises from April to June 2021
  • Extension of the deadline for submission of the FY2020 financial statements until 30 June 2021
  • Exemption from import duty and taxes on the importation of equipment related to the prevention and treatment of COVID-19
  • Reduction in the VAT rate for tourism activities and other tourism-related services, the details of which will be specified by notice of the Ministry of Finance after its consideration
  • Extension of the deadline to pay road tax until 30 June 2021

2. Credit policies

  • The policies previously put in place for customers of commercial banks and financial institutions that have been impacted by the COVID-19 pandemic will continue:
    • Extension of the deadline to pay loan principal and interest
    • Reduction in the loan interest rate
    • Reduction in related fee charges
    • Offering of new loans
    • Restructuring of existing loans 
  • Production activities of goods that can be substituted for imported products and SMEs will continue receiving funding and credit support for their production from the Bank of the Lao PDR

3. Labor allowance policies

  • Allowances will be offered to laborers, as follows:
    • Provision of unemployment allowance to insured persons who have been impacted by the COVID-19 pandemic
    • Suspension and postponement of Lao social security organization (“LSSO”) contributions of laborers and business units that have temporarily closed and are not paying salaries to laborers
    • Provision of a sickness allowance from the LSSO during the postponement period
    • Provision of [minimum living] allowances from the Ministry of Labor and Social Welfare to laborers that are not under the Lao social security regime (based on their actual condition)

4. Policies for the public

  • Provision of a discount on supplies of water, electricity, internet, and garbage collection
  • Postponement of the deadline for the payment of water supply bills from May to July 2021

If you have any questions about this alert, please contact the undersigned or your usual VDB Loi adviser.


Chanhsamone has a solid understanding of Lao tax law, the TAXRIS system, tax registration, and tax compliance. She assists clients from a variety of sectors, including energy and infrastructure, with their customs and taxation issues. Chanhsamone has a Bachelor of Accountancy in Customs and Taxation from the National University of Laos.

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