This presentation was made by Thongsa Homesombat, Lao, at the 14th OECD-Asian Senior Budget Officials Meeting held in Bangkok, Thailand, on 13-14 December 2018

1. State budget Implementation of 2018
and 2019 plan in Lao PDR
Presented by: Mr.Thongsa Homesombat
Deputy Director of Division, Budget Department
December 13, 2018

2. contents

 Budget implementation of 2018.
 The Prioritized programs for public Financial
Management Reform.
 Budget plan of 2019
 2019 Fiscal Policies and Measures.

3.  Budget implementation of 2018
Unit: Billion kip
• Compare to other past years
Unit: Billion kip
Revenue plan Revenue (Actual) Expenditure plan Expenditure(Actual)
2015-2016 23,700 22,288 28,805 27,806
2017 23,941 22,962 32,402 30,426
2018 25,452 25,495 32,809 32,692
No. Contents
Plan Actual Comparison (%)
1 2 3 = 2/1
I Total revenue (1+2) 25,452 25,495 100.17%
1Revenue 22,700 22,421 98.77%
2Grants 2,752 3,074 111.70%
II Total expenditure (1+2+3) 32,809 32,692 99.64%
1Current expenditure 20,157 19,940 98.92%
2Capital expenditure 4,600 4,700 102.17%
3Foreign capital expenditure 8,052 8,052 100.00%
III Financing (I-II) -7,357 -7,197

4.  Comparison of the 2018 implementation to other FY.
Factors: The reasons of the revenue collection cannot be implemented as planned over last
period are because the endogenous and exogenous factors such as:
 Prices of minerals and electricity decreased , which were lowed than a projection.
 Economic expansion made a slow with an average growth at 7%. Furthermore, the key
factor affecting the economic expansion is a tax exemption regarding to investment
promotion.
 Natural disasters such as flooding, drought …
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
2015/16 2017 2018
Revenue plan
Revenue (Actual)
expenditure plan
expenditure(Actual)

5.  Six Priorized programmes
1: Fiscal Policy Improvement
2: Legal Framework Development and Improvement for Public
Finance Sector.
3: Revenue Management Reform.
4: Expenditure Management Reform.
5: Modernisation of Public Fiance Sector.
6: Organizational Structure and Human Resource Development.

6.  Budget plan of 2019
 Enhance the effectiveness and expanding revenue base to increase internal revenue around 9%;
 Ensure an economized and effective public expenditure, especially manage increase in internal
expenditure at about 50% of the increase in internal revenue;
 Foreign capital expenditure (project loans): selecting the best projects. New project loans (< $200
million/year and issuing government bonds each year not more than $200 million);
 Enhance internal revenue to sufficiently cover internal expenditure to decrease the public debt.
Unit: Billion kip
No. Contents
2018 2019 comparison % 2019
1 2 3 = 2/1 ( % of GDP)
I Total revenue (1+2) 25,495 26,505 103.96% 16.0%
1Revenue 22,421 24,440 109.00% 14.8%
2Grants 3,074 2,065 67.18% 1.2%
II Total expenditure (1+2+3) 32,692 33,434 102.27% 20.2%
1Current expenditure 19,940 22,121 110.94% 13.4%
2Capital expenditure 4,700 4,200 89.36% 2.5%
3Foreign capital expenditure 8,052 7,113 88.34% 4.3%
III Financing (I-II) -7,197 -6,929 -4.2%

7.  Revenue:
 Establishing an comprehensive and clear database to expand revenue base
and create new revenue bases;
 Modernising a revenue management system and banking payments system;
 Expanding and strictly enforcing a Value-added Tax (VAT) collection into
laws;
 Inspect a large business that filed tax below reality, monitor and decelerate
claims of outstanding debts with large companies;
 Issuing measures on managing and enhancing the smuggling of goods
import and registering all shipping service companies in a harmonised
system;
 Reviewing and improving the management of the State-owned Enterprises
(SOE);
 Implementing the allocation policies of revenue collected more than plan to
line ministries and provinces in ratio of 60/40;
 Reviewing and improving the management measures of fuel import;
 Establish and improve some laws i.e. Law on Tax Administration, Income
tax, excise tax, customs and insurance.
 2019 Fiscal Policies & Measures

8.  Expenditure:
 Implementing policies and allowances to heads of village nationwide;
 Improving payroll management system;
 Studying financing measures to ensure the liquidity of expenditure
implementation at local level;
 Strengthening monitoring measures of expenditure implementation and
post-auditing;
 Issuing instructions on the new and advised Laws. i.e. Law on Public
Procurement, state budget law, and implementing the Prime Ministerial
Decree No. 09/PM on economization;
 Improving legislations and mechanism of implementing revenue,
expenditure;
 Inspecting and improving the Prime Ministerial Decree 468/PM on special
allowance policies to officials who work in the remote areas;
 Adhering strictly to the plan approved by NA. and financial disciplines;
 2019 Fiscal Policies & Measures (Cont.)

9.  2019 Fiscal Policies & Measures (Cont.)
Financing:
 Expanding bond market​ such as China and other countries;
 Distribute the Government bonds in stock market;
 Studying measures on revenue-expenditure financing for
provinces;
 Stop new loans with market conditions (high interest),
focusing on good soft loans;
 No issuing the Government security to business sector.

10. THANK YOU