1 TARIFF MEASURES
Structure of the tariff schedule
Laos uses the Customs Cooperation Council Nomenclature for classification
of goods.
| 11 |
The Lao import tax system aims at promoting the import of materials
and equipment for investment and production, while protecting domestic
production and limiting import of luxury goods. Therefore the following
rates apply to imported goods: 5% on heavy equipment and machine tools,
10% on some medicines, materials used in light industry such as fabric
and chemical industries; 20% on food products such as frozen fish; 30%
for certain fruit and vegetables; 40% for automobiles, and 45% on garments
and textiles. Import taxes on aid import are levied at 80% of the
price. |
| 16 |
Foreign investors may import equipment, production materials, and spare
parts at 1 percent duty rates, and raw materials and intermediate goods
for re-export purposes, duty-free; raw materials and intermediate goods
serving as import substitutions are eligible for reduced duties.
In general, products imported for the purposes of processing, assembly
into finished products or for exhibition and subsequent re-export are exempt
from duty. Duty exemption is also set on tools and devices imported
for national defense and national security purposes if the import is duly
certified by the ministry concerned. |
Preferential
duties under trade agreements
| 19.1 |
Laos together with India, Korea, the Philippines, Sri Lanka and Thailand
are member of the Bangkok Agreement for liberalized trade among the less
developed member countries of the Economic and Social Commission for Asia
and the Pacific (ESCAP). The agreement provides for mutual tariff
concessions on some agricultural items, manufactured goods, chemicals,
and minerals. |
| 19.2 |
Laos belongs to the Association of Southeast Asian Nations (ASEAN)
together with Brunei, Cambodia, Indonesia, Malaysia, the Philippines, Thailand
and Vietnam. ASEAN was formed to promote economic, social, cultural
and scientific ties, as well as trade and monetary policies. Other
areas of cooperation among ASEAN members include harmonization of standards,
reciprocal recognition of tests and certification of products. In
1992, members called for the formation of an ASEAN Free Trade Area within
15 years. Within the framework of AFTA, Laos will reduce customs
duties to 0%-5% until the end of 2008. Customs duties on 533 items
will be reduced until the end of 2000. There will be two temporary
sensitive lists. Customs duties of one of these lists including 2818
items will be reduced within 8 years, and customs duties of the other sensitive
list will be reduced within 17 years. Vietnam which joined ASEAN
in 1995 would implement its tariff reductions to 0-5% by 2003; Myanmar
which joined the group in 1997, will complete the reductions by 2005. No
common external tariff is planned; tariff rates on imports from non-ASEAN
countries will continue to be determined individually.
In addition to intra-ASEAN trade and ties, ASEAN aims at strengthening
links with other preferential trade regimes in the region, for example,
the high-level task force between the AFTA and the Closer Economic Relations
(CER i.e. a trade agreement between Australia and New Zealand) established
to study the feasibility of settling an AFTA-CER free-trade agreement by
2010. ASEAN is pursuing similar agreements with other regional
groupings such as the Southern Common Market (MERCOSUR), and the Southern
African Development Community (SADC).
With the ASEAN Industrial Cooperation Scheme AICO, final products
as well as raw materials, and semi-finished goods may be imported at preferential
rate of maximum 5%. |
| 19.3 |
The government of Laos has concluded bilateral trade agreements with
Mongolia, China, Vietnam, Poland, Bulgaria, and several other Eastern European
countries.
Laos through the framework of ASEAN, maintains a commercial and economic
cooperation agreement with the European Union. The agreement provides
for most favoured-nation treatment, and studies to remove trade barriers,
create new trade patterns, and recommend trade promotion measures. |
2 PARA-TARIFF MEASURES
| 22.9 |
The following charges are assessed on pre-shipment inspection for imported
goods of the following value: a fee of US$150 is assessed on FOB value
between US$2500-5000; US$300 on FOB value between US$5001-30,000;
1% of FOB on FOB value over US$30,000. |
| 23.2 |
Excise taxes are levied on a wide range of products, and are
assessed at rates ranging from 72% to 104% on automobiles depending on
engine sizes; 50% on motorcycles, beer and cigarettes; and 60% on alcoholic
beverages. |
| 23.9 |
A business or turnover tax based on the CIF value of the product plus
the import duty, and paid at the time of import, is levied on most goods.
It ranges between 5% levied on essential goods, agricultural equipment,
power tools, construction equipment, fabric and cotton thread; and a higher
rate assessed on other goods. Goods exempt from the levy of the turnover
tax include rice, fertilizer, animal feed, fire trucks and wheelchairs.
The Lao Government is expected to introduce value added tax, which will
replace the turnover tax by 2002. |
| 24 |
The value for duty is the CIF cost determined by the wholesale price
plus importation costs. The cost of inner and outer packaging with
commercial value usually is included in the dutiable value. This
mechanism applies to all goods except for vehicles. Motor vehicle
values are based on a fixed cost schedule, which is not made public.
In general when products are made of several materials, the major material
used will serve as the basis for computing the duty. And when equal
amounts of several materials are used, the material with the highest value
serves as the basis of computation. Also, if an item can be placed
under several tariff code numbers and if the tax rates are equivalent,
it will be classified by its main use. If tax rates are different,
then the code number with the highest tax rate will be used. Furthermore,
merchandise received under foreign aid is valued at the domestic sale price
of the product. |
4 FINANCE MEASURES
| 41.1 |
Margin deposits for opening letters of credit are determined by the
Lao Bank for Foreign Trade and other commercial banks on a case-by-case
basis. |
| 43.2 |
Official foreign exchange transactions related to trade are handled
by the Lao Bank for Foreign Trade. Payment for authorized imports
comes from retained export earnings, foreign exchange obtained in the parallel
market, and foreign exchange allocated by the bank of Foreign trade. |
6 QUANTITY CONTROL MEASURES
Import licenses are issued by the Ministry of Commerce and
are obtainable by the Provincial Trade Authority where the importing enterprise
is located. An import license is valid for three months, during which
time, payment for imports and import duties should be made. Imports
are categorized as encouraged, controlled, or prohibited.
| 61.71 |
A prior authorization from the Ministry of Health is required for the
importation of pharmaceuticals that will be sold locally. |
| 61.74 |
An import authorization from the Ministry of Agriculture and Forestry
is necessary to import fertilizers and agricultural chemicals. |
| 62.9 |
Imports of automobiles and other vehicles are subject to quotas; the
quota approval is issued by the Ministry of commerce and tourism. |
| 63.1 |
General prohibitions apply to imports of weapons, war materials by
private citizens, illegal drugs, toxic chemicals, hazardous materials,
and items considered by the government to be obscene. |
| 63.7 |
It is prohibited to import agricultural goods that are grown domestically
in sufficient quantities i.e., eggplants, tomatoes, bananas, chilies and
lemons. |
8 TECHINICAL MEASURES
| 81.19 |
A technical specification approval from the Ministry of Communications
and Transport is required for the import of cars and other vehicles. |
| 82 |
Pre-shipment inspection
For the goods to enter the country, the importer must present a customs
clearance report. The report is prepared by certified customs specialists
or certified customs clearance corporations only.
As of 1 of June 2000, the Government of Laos will be requiring pre-shipment
inspection of all imported goods with an FOB order value of US$2500 or
more. The pre-shipment inspection regulation has been issued by the
Ministry of Finance on 11 May 2000, the act has been published in the Official
Notification of 18 of May 2000. Societe Mixte d'Inspection Lao Bivac
International (LAOBIVAC), carries out the pre-shipment inspection.
The following goods are exempt from the pre-shipment inspection requirement:
fresh, refrigerated or frozen foods uner codes 02, 03, 401, 403, 404, 405,
406, 407, 408, 410; used wearing apparel, newspapers and periodicals, fresh
or dried flowers, used tyres; scrap under 7204, 7404, 7602, 7802, 7902,
8002; original works of art, explosives and explosive devices; jewellery
including precious stones and unworked precious metals; arms and ammunition
for the Government agencies or forces; and live animals classified under
chapter 1 and headings 301 and 9508. |
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