The government says the tax debt will be slashed by 50% in response to a prorated drop in cryptocurrency prices after the obligations were set.
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In an effort to boost state revenues, Laos appears to be turning its attention to the country’s crypto sector.
According to a Nov. 9 report by Chinese state news agency Xinhua News, citing a report from the Lao People’s Army News, cryptocurrency operators in the Southeast Asian country owe $20 million in taxes and licensing fees. Laos previously authorized 15 blockchain companies to mine crypto or operate as exchanges to expand government revenue streams.
However, as detailed by Lao Prime Minister Sonexay Siphandone, two companies in the novel initiative “made no progress” whatsoever. Others, meanwhile, fell behind on their payment obligations to the state. Sonexay also noted that since the government fixed the tax obligations, the price of cryptocurrencies has plummeted 50% overall. Therefore, Laos will reduce the balance owed by crypto companies by 50% as well.
With that decision, the companies began paying their fees, and it is expected that all the fees will be fully settled by the end of the year, said Sonexay. However, he also warned that companies falling behind on their progress will have their operations suspended or fined, or their license revoked.
Laos faced a crisis this year with an extended drought lasting between January and June. The disaster, among many casualties, forced state-owned electricity distribution company Électricité du Laos to suspend electricity supply to the country’s crypto-mining operations. In May, Laos outlined several key tenets for its digital transformation, among which is the use of digital technology to generate new fiscal revenue, bolster foreign exchange reserves, curb inflation and foster sustainable economic growth.
Blockchain 4.0 is revolutionizing #Laos. It’s driving financial inclusion, fostering transparency, and enhancing security in transactions. Smart contracts and decentralized finance are opening new avenues for growth. Truly, a game-changer for the nation’s economy. #MetaBankLaos… pic.twitter.com/oyaAKzFNjk
— MetaBank (@MetaBankSG) May 27, 2023
