Top Laos officials recently announced that it is strengthening its trade ties with its neighbours. Part of this effort is the fact that the country is slashing import tariffs on more than 8,000 products produced by its ASEAN neighbours.
Many trade analysts have viewed Laos' recent gesture as a way to further strengthen the ASEAN Free Trade Area. Many believe that in a time when global trade is being disrupted by isolationist agenda, Laos is embracing global free trade by dropping import tariffs on 8,546 items. Laos is setting import tariffs on these items to zero.
The report was distributed by Laos' Ministry of Planning and Investment. It was unveiled recently during the annual meeting of the country's finance and planning sector held at Vientiane, the capital city of Laos. The news was subsequently published by a number of local news outlets in the country.
The total number of goods which Laos added on its zero tariff list represents about 89 percent of the total number of items included in a designated list which the country trades with other member of the ASEAN Trade in Goods Agreement or ATIGA. This was according to a recent report published by the National Socio-Economic Development.
The same report also indicated that Laos is only able to maintain import tariffs on a number of goods which the country sees as of vital importance to its overall economic stability. Because of this agreement, Laos maintains the same level of tariffs on 325 items.
An official from the Laos Customs bureau confirmed that under the terms of the ASEAN Free Trade Agreement, each member country has the right to select a number of goods on which the level of import tariffs can be maintained. This particular rule was adopted in order to make sure that each country's trade will remain stable, and also to prevent huge drops in domestic revenue collections.
In order to drive domestic revenue, Laos has imposed 10 percent value added tax on various goods that are imported into the country. On top of that, turnover and excise taxes on imported goods were also changed.
Laos started implementing the rules and regulations of the ASEAN Free Trade Agreement in 2015. The main purpose of this trade agreement is to eliminate trade tariffs across all member nations in order to boost trade. The ASEAN region has a substantial market which currently hovers to around 600 million consumers.
