Lao Electricity Company gives double whammy punch to lower income Laotians

(KPL) Farmers, workers and government officials were being burdened by the rapid rise in the cost of living in the 2009-2010 fiscal year. To add to their suffering there was a hike in the price of electricity in 2009, but just recently there was an announcement by the Lao Electricity Company that there will be a replacement of 5% turnover tax by a 10% value added tax (VAT) on the electricity bills.
This company said that based on the government�s announcement that the VAT would be operational in Laos from 1 January 2010, it would then cease to impose the five per cent turnover tax on electricity usage by consumers and replace it with the 10 per cent VAT, an increase of five per cent.
The Lao Electricity Company made a declaration on 5 January that this new ruling would enable the Lao government to collect more revenue.
According to officials who wanted to remain anonymous the five per cent hike would have adverse effects on the finances of the lower income group in the Lao society, farmers, workers and officials.
Government officials and the poor asked why it was that the cost of electricity in Laos should trend upwards and become expensive by Lao standard when it was exporting electricity to other countries and was planning to construct quite a few more dams on the tributary rivers of the Mekong River to generate electricity for export to earn more money.
According to the Tax Department, the introduction of the VAT system would enable Laos to enjoy revenue increase by as much as 1.4 per cent. Laos is one of the least developed countries (LDCs) that has introduced the VAT system and in doing so it has joined the ranks of 130 countries in the world to do so.