Laos restores its standard VAT rate to 10% from 7% by Presidential Decree No. 003 of 19 March 2024

What changed in detail

Presidential Decree No. 003/ປປທ on the adjustment of the value-added tax rate (ລັດຖະບັນຍັດ ວ່າດ້ວຍການປັບປຸງອັດຕາອາກອນມູນຄ່າເພີ່ມ) was signed by the President of the Lao PDR on 19 March 2024 and published in the Lao Official Gazette on 26 March 2024.

Article 1 amends item 1 of Article 17 of the VAT Law, as amended by Law No. 01/ສພຊ of 7 August 2021, raising the standard VAT rate from 7% to 10%. Article 2 applies the 10% rate to:

• imports of goods and domestic supplies of goods and services subject to VAT in the Lao PDR;
• imports of minerals and domestic supplies of minerals; and
• the use of electricity by general users, producers and distributors.

Article 3 makes the Government responsible for implementing the decree. Under Article 4, it takes effect from the date the President signs it. The recitals cite a resolution of the National Assembly Standing Committee, No. 20, dated 7 March 2024.

What it means

The 10% rate reverses the cut to 7% made by the 2021 amendment of the VAT Law. The decree changed the rate without a new act of the National Assembly, using a presidential decree adopted after the Standing Committee’s resolution.

Because the decree took effect on signature, it set no transition date, and it was published a week after it took effect. For contracts and invoices spanning March 2024, the rate turns on the 19 March signature date the decree states, not on the publication date. No later instrument changing the rate was found on the Lao Official Gazette when this record was written, so 10% is treated here as the current standard rate.