In 2026, the Government of the Lao People's Democratic Republic, with technical support from the United Nations Development Programme (UNDP), prepared Lao PDR's first Tax Expenditure Report. The report provides a systematic assessment of tax expenditures in Lao PDR, defined as revenue foregone as a result of preferential provisions or deviations from the benchmark tax system. Tax expenditures play a significant role in Lao PDR's fiscal framework.
The report covers the period 2019–2023 and uses the revenue foregone approach to estimate the fiscal cost of tax expenditures by comparing actual revenue collected against what would have been collected under a benchmark tax system without preferential treatment. The study covers 540 concession agreements and government-controlled business projects approved by the central authority and nine provinces. It assesses tax expenditures across major tax categories, including Profit Tax, VAT, Customs Duty, Excise Duty, and Non-Tax Revenue. The report serves as an evidence base to inform policy decisions on sustainable domestic revenue mobilization in Lao PDR.
The report is linked to Lao PDR’s integrated national financing framework process, which supports the development of financing strategies for the country’s five-year national development plans. Both the 9th and 10th National Socio-Economic Development Plans place strong emphasis on domestic resource mobilization and addressing tax exemptions. By generating new evidence on the scale and composition of tax expenditures, the report helps inform implementation of Lao PDR’s financing strategy and supports more sustainable revenue mobilization.
You can find the press release here and the promotional video here.
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